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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
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Table of
Contents
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2016 Proxy Statement at a
Glance
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This summary highlights information
contained elsewhere in these proxy materials, but does not contain all of the
information that you should consider, and you should read the entire proxy
statement carefully before voting.
Meeting Information
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Date and Time:
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May 18,
2016, 8:00 a.m., Mountain Time
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Record Date:
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April 6,
2016
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Place:
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200
Inverness Drive W, Englewood, CO 80112 (The Inverness Hotel –
DTC)
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Voting:
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Stockholders
of record as of April 6, 2016 are entitled to vote by telephone or over
the Internet, or by completing, signing, dating and returning their proxy
card or voting instructions card
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Voting Matters and Board Recommendations
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Proposals
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Board’s
Recommendation
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Page
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To elect C. David
Kikumoto, the Honorable Jessica L. Wright, Major General (Ret.),
and
Joseph E. Whitters as Class I directors of the Company for
three-year terms.
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FOR all Director
Nominees
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4
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To ratify the appointment of KPMG LLP
as the Company’s independent registered public
accounting firm for the
fiscal year ending December 31, 2016.
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FOR
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46
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To approve, on an
advisory basis, named executive officer compensation.
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FOR
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49
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To approve the amendment and
restatement of the Company’s current certificate of
incorporation and
current bylaws in order to declassify its Board of Directors.
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FOR
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50
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Select Performance and Compensation Highlights for 2015
For more complete information, please
review the Company’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 26, 2016 and the complete proxy statement.
2015 Business Performance
Highlights*:
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Year-over-year increase in
revenue of 8.1%
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●
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Year-over-year increase in
fully-diluted earnings per share (“EPS”) from Continuing Operations of
7%
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Year-over-year increase in EBITDA
from Continuing Operations of 8.7%
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Year-over-year increase of
community-based transports of 8.9%
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All three of our operating
segments (Air Medical Services, Tourism and United Rotorcraft) achieved
improvement in revenue and earnings in 2015 relative to 2014
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Same base requests for
community-based transports increased nearly 4.5% from 2014
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Year-over-year same base
transports decreased only 237 transports despite an increase of nearly
3,200 same base weather cancellations
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Deployment of approximately
$287.2 million to facilitate the purchase of hospital programs and the
purchase of Tri-State CareFlight, L.L.C. (“Tri-State CareFlight”) in
January 2016. The acquisition of Tri-State CareFlight is expected to be
immediately accretive to the Company’s EPS by more than $0.20 in 2016 and
more than $0.30 in 2017.
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* See page 30
for further information on Non-GAAP financial measures.
Table of
Contents
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2016 Proxy Statement at a Glance
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The Company has a history of delivering
consistent positive return to stockholders over time. As shown in the chart
below, total shareholder return (“TSR”) in 2015 was negative for the Company, as
well as its peer groups; however, the Company’s stockholders avoided the severe
decline experienced by Air Methods’ peers. Over the last five years, the Company
substantially outperformed the Standard & Poor 500 Index (the “S&P 500”)
and its peers, delivering an 18.99% five-year annualized TSR.
TSR Relative to Market
Proposals to be Voted on by Stockholders
Proposal One: Election of Directors (page
4)
The Board of Directors recommends a
vote FOR each of the director nominees.
Subject to the Uncontested Elections
Policy set forth in Section 2(h) of our Corporate Governance Guidelines (see
“Board of Directors and Governance Principles” for further information about the
Uncontested Elections Policy), the director nominees receiving the highest
number of votes cast (plurality) at the Annual Meeting will be elected for a
term of three (3) years. The nominating and governance committee of the Board of
Directors has evaluated each individual director nominee listed below and
confirmed that each nominee has the skills, education, experience and
qualifications required to help further the success of the Company’s business
and represent stockholder interests.
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Name
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Age
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Director
Since
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Committee Membership
(1)
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C. David
Kikumoto
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66
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2004
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None
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MG Jessica L. Wright, USA
(Ret.)
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63
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2016
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Healthcare Affairs
Committee
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Joseph E.
Whitters
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58
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2016
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Finance &
Strategic Planning Committee
Audit
Committee
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(1)
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The nominating and governance
committee of the Board of Directors plans to appoint MG Jessica L. Wright
and Mr. Whitters to the committees listed above immediately following the
2016 Annual Meeting.
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Attendance –
Mr. Kikumoto attended 100% of the Board of
Directors
meetings during 2015 and all Board of Directors’ meetings held to date in
2016. The Honorable Jessica L. Wright, Major General (Ret.) and Joseph E.
Whitters did not attend any Board of Directors
meetings in 2015, as they were each
appointed to the Board in 2016. The Honorable Jessica L. Wright, Major General
(Ret.) has attended all Board of Directors
meetings held to date since her
appointment to the Board of Directors. None of the nominees served on any
committees of the Board of Directors during 2015 and will be appointed to the
committees noted above immediately following the 2016 Annual
Meeting.
Key Qualifications of Each Nominee
– Senior leadership experience, healthcare
experience, aviation and financial experience (See pages 6-7 for additional
details)
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Continues on next page
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
Table of
Contents
Proposal Two: Ratification of KPMG LLP as
Independent Auditors (page 46)
The Board of Directors recommends a
vote FOR the ratification of the appointment of KPMG LLP as the Company’s
independent accountants for the 2016 fiscal year.
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2015
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2014
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Audit fees
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$
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970,000
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$
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885,000
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Audit-related fees
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$
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41,000
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$
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—
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Tax fees
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$
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—
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$
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—
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All
other fees
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$
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—
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$
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—
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Total
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$
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1,011,000
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$
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885,000
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Proposal Three: Advisory Vote to Approve
Executive Compensation (page 49)
The Board of Directors recommends a
vote FOR the approval, on an advisory basis, of the compensation for the named
executive officers as disclosed in this proxy statement. The Board of Directors
recommends a vote FOR this Proposal No. 3 because it believes that the executive
compensation programs established for the named executive officers and the
compensation amounts paid thereunder align with the interests of stockholders.
This advisory proposal was supported by
approximately 97% of the votes cast in each of 2015 and 2014. Please see the
Compensation Discussion and Analysis, Summary Compensation Table and other
tables and disclosures beginning on page 21 of the proxy statement for a full
discussion of our executive compensation program.
The table below highlights the 2015
total annual direct compensation for each of the named executive officers. This
table does not include all of the information included in the Summary
Compensation Table.
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Named Executive Officer
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Base
Salary
Earnings
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2015 Annual
Cash
Incentive
Compensation
Paid Under
the STIP
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Equity Awards
(Stock
Options
and Performance
Share Units)
1
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2015 Total
Annual
Direct
Compensation
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Aaron D. Todd,
Chief Executive Officer
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$
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765,000
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$
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420,766
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$
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1,386,778
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$
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2,572,544
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Michael D. Allen,
President, Domestic Air Medical
Services
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$
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459,000
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$
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245,574
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$
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554,714
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$
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1,259,288
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Trent J. Carman,
Chief Financial Officer and
Treasurer
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$
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408,000
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$
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212,168
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$
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493,073
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$
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1,113,241
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David Doerr,
EVP, Business Development
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$
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408,000
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$
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228,080
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$
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493,073
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$
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1,129,153
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Crystal L. Gordon,
General Counsel, Secretary, and Senior
Vice President
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$
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331,500
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$
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182,332
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$
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400,631
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$
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914,463
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(1)
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In 2015, each of the named
executive officers received (i) stock options with a three-year vesting
period and (ii) performance share units, which are subject to a designated
three-year performance period. The vesting period for the performance
share units is determined by the Company’s total shareholder return
percentile (the “TSR Percentile”). The TSR Percentile means the percentile
rank of the Company’s total shareholder return (“TSR”) during the
performance period relative to the TSR of other companies in the
designated peer group during the performance period as determined by the
Company. See page 31 for additional information regarding the Company’s
2015 long-term incentive program.
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Proposal Four: Amendment and Restatement of
Certificate of Incorporation and Bylaws to Declassify Our Board (page
50)
The Board of Directors recommends a
vote FOR the proposal to amend and restate the current Certificate of
Incorporation and First Amended and Restated Bylaws of the Company in order to
declassify our Board of Directors.
To be approved, this proposal requires
the affirmative vote of the holders of at least 80% of the voting power of all
outstanding shares of the Company entitled to vote generally in the election of
directors, voting together as a single class. Abstentions and broker non-votes
will be treated as votes against this proposal.
Table of
Contents
Table of
Contents
|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
Table of
Contents
Table of
Contents
|
|
2016 Proxy Statement
FAQ’s
|
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AIR METHODS CORPORATION
7211 South
Peoria Street
Englewood, CO 80112
(303) 792-7400
PROXY
STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 18, 2016
The Board of Directors of Air Methods
Corporation, a Delaware corporation (the “Company”), is soliciting the enclosed
proxy for use at our Annual Meeting to be held on Wednesday, May 18, 2016,
beginning at 8:00 a.m., Mountain Time, at The Inverness Hotel – DTC, located at
200 Inverness Drive W, Englewood, Colorado 80112, and at any time and date to
which the Annual Meeting may be properly adjourned or postponed. This proxy
statement and the accompanying Notice of Annual
Meeting of Stockholders describe the
purpose of the Annual Meeting. Distribution of these proxy solicitation
materials is scheduled to begin on or about [TBD]. The proxy statement,
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2015 and proxy card also are available on our website
www.airmethods.com
under the
“Investors” tab. The contents of our website are not incorporated by reference
into this document for any purpose.
Why am I receiving this proxy
statement and proxy card?
You have
received these proxy materials because our Board of Directors is soliciting your
proxy to vote your shares on the proposals described below at the Annual
Meeting. This proxy statement describes issues on which we would like you to
vote at our Annual Meeting. It also provides you with information on these
issues so that you may make an informed decision on the proposals to be voted on
at the Annual Meeting.
What is the purpose of the
Annual Meeting?
At our Annual Meeting,
stockholders will vote on the following four items of business:
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1)
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To elect C. David Kikumoto, the
Honorable Jessica L. Wright, Major General (Ret.), and Joseph E. Whitters
as Class I directors of the Company for three-year terms.
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2)
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To ratify the appointment of KPMG
LLP as the Company’s independent registered public accounting firm for the
fiscal year ending December 31, 2016.
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3)
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To approve, on an advisory basis,
named executive officer compensation.
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4)
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To approve the amendment and
restatement of the Company’s current Certificate of Incorporation and
current Bylaws in order to declassify its Board of
Directors.
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You will also vote on such other
matters as may properly come before the meeting or any postponement or
adjournment thereof.
What are the recommendations of
the Board of Directors?
Our
Board of Directors recommends that you vote:
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“FOR” the election of each of
the three (3) nominated directors (see Proposal 1).
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“FOR” the ratification of the
appointment of KPMG LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2016 (see Proposal
2).
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“FOR” the approval of the
advisory vote on executive compensation (see Proposal 3).
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“FOR” the approval of the
amendment and restatement of the Company’s current Certificate of
Incorporation and current Bylaws in order to declassify its Board of
Directors (see Proposal 4).
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With respect to any other matter that
properly comes before the meeting, the proxy holders will vote as recommended by
the Board of Directors or, if no recommendation is given, in their own
discretion.
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Continues on next page
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
1
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Table of
Contents
What shares are entitled to
vote?
As of April 6, 2016, the record date
for the Annual Meeting, we had 39,681,359 shares of common stock outstanding.
Each share of our common stock outstanding on the record date is entitled to one
vote on each item being voted on at the Annual Meeting. You can vote all of the
shares that you owned on the record date. These shares include: (1) shares held
directly in your name as the stockholder of record and (2) shares held for you
as the beneficial owner through a broker, bank or other
nominee.
What is the difference between
holding shares as a stockholder of record and as a beneficial
owner?
Most stockholders hold their
shares through a broker, bank or other holder of record rather than directly in
their own name. As summarized below, there are some distinctions between shares
held of record and those owned beneficially.
Stockholder of Record.
If your shares are registered directly in
your name with our transfer agent, American Stock Transfer & Trust Company,
you are considered, with respect to those shares, the stockholder of record, and
we are sending these proxy materials directly to you. As the stockholder of
record, you have the right to grant your voting proxy directly to the named
proxy holder or to vote in person at the Annual Meeting. We have enclosed a
proxy card for you to use.
Beneficial Owner.
If your shares are held in a brokerage account, by a bank, or
other nominee, you are considered the beneficial owner of shares held in “street
name,” and these proxy materials are being forwarded to you from that holder
together with a voting instruction card. As the beneficial owner, you have the
right to direct your broker, bank or other nominee how to vote and also are
invited to attend the Annual Meeting.
Since a beneficial owner is not the
stockholder of record, you may not vote these shares in person at the Annual
Meeting unless you obtain a “legal proxy” from the broker, bank or other nominee
that holds your shares, giving you the right to vote the shares at the Annual
Meeting. Your broker, bank or other nominee has enclosed or provided voting
instructions for you to use in directing the broker, bank or other nominee how
to vote your shares.
Who may attend the Annual
Meeting?
All stockholders as of the
record date, or their duly appointed proxies, and beneficial owners may attend
the Annual Meeting. If you are a beneficial owner and not a stockholder of
record, you should provide proof of beneficial ownership on the record date,
such as your most recent account statement as of April 6, 2016, a copy of the
voting instruction card provided by your broker, bank or other nominee, or other
similar evidence of ownership.
Registration and seating will begin at
7:30 a.m., Mountain Time. Cameras, recording devices and other electronic
devices will not be permitted at the Annual Meeting.
How may I vote my shares in
person at the Annual Meeting?
Shares
held in your name as the stockholder of record may be voted in person at the
Annual Meeting. Shares for which you are the beneficial owner may be voted in
person only if you obtain a legal proxy from the broker, bank or other nominee
that holds your shares giving you the right to vote the shares. Even if you plan
to attend the Annual Meeting, we recommend that you also submit your proxy or
voting instructions card prior to the Annual Meeting as described below so that
your vote will be counted if you later decide not to attend the Annual
Meeting.
How may I vote my shares without
attending the Annual Meeting?
Whether
you hold shares directly as the stockholder of record or beneficially in street
name, you may direct how your shares are voted without attending the Annual
Meeting. If you are a stockholder of record, you may vote by submitting a proxy.
If you hold shares beneficially in street name, you may vote by submitting
voting instructions to your broker, bank or other nominee. For directions on how
to vote, please refer to the instructions included on your proxy card or, for
shares held beneficially in street name, the voting instruction card provided by
your broker, bank or other nominee.
May I change my vote or revoke my
proxy after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change the votes
you cast or revoke your proxy at any time before the votes are cast at the
Annual Meeting by: (1) delivering a written notice of your revocation to our
corporate secretary at our principal executive office, 7211 South Peoria Street,
Englewood, Colorado 80112 or (2) executing and delivering a later dated proxy.
In addition, the powers of the proxy holders will be suspended if you attend the
Annual Meeting in person and so request, although attendance at the Annual
Meeting will not by itself revoke a previously granted proxy.
What is a broker
non-vote?
If you are a beneficial
owner whose shares are held of record by a broker, bank or other nominee and you
do not provide voting instructions to such broker, bank or other nominee, your
shares will not be voted on any proposal on which the broker, bank or other
nominee does not have discretionary authority to vote. This is called a “broker
non-vote.” Your broker, bank or other nominee
only
has discretionary authority to
vote on Proposal Two (ratification of KPMG LLP). Therefore, your broker, bank or
other
2
Table of
Contents
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2016 Proxy Statement
FAQ’s
|
|
|
nominee will not have discretion to
vote on Proposals One, Three or Four unless you specifically instruct them on
how to vote your shares by returning your completed and signed voting
instruction card.
What constitutes a
quorum?
The presence at the Annual
Meeting, in person or by proxy, of the holders of one-third of the shares of our
common stock outstanding as of the record date will constitute a quorum. There
must be a quorum for any action to be taken at the meeting (other than an
adjournment or postponement of the meeting). If you submit a properly executed
proxy card, even if you abstain from voting, then your shares will be counted
for purposes of determining the presence of a quorum. Broker non-votes will be
counted for purposes of determining the presence of a quorum at the Annual
Meeting.
What vote is required to
approve each item?
|
Proposal
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Vote
Required
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Proposal No. 1:
Election of three Class I
directors
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Subject to our Uncontested Elections Policy, the three
nominees who receive the greatest number of votes cast (plurality) will be
elected as directors for a term of three years. There is no cumulative
voting for directors. Abstentions and broker non-votes will not be counted
for purposes of the election of directors and therefore, will have no
effect on the outcome of such election.
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Proposal No. 2: Ratification of KPMG LLP as the
Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2016
|
Majority of votes cast. Abstentions are not considered
votes cast and therefore will have no effect on the outcome of Proposal
No. 2.
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Proposal No. 3: Advisory vote on the compensation for
the Company’s named executive officers
|
Majority of votes cast. Abstentions and broker non-votes
are not considered votes cast and therefore will have no effect on the
outcome of Proposal No. 3.
|
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Proposal No. 4: Amendment and restatement of the
Company’s current Certificate of Incorporation and current Bylaws in order
to declassify its Board of Directors.
|
Affirmative vote of the holders of at least 80% of the
voting power of all outstanding shares of the Company entitled to vote
generally in the election of directors, voting together as a single class.
Abstentions and broker non-votes are treated for purposes of Proposal No.
4 as votes against this proposal.
|
What does it mean if I receive
more than one proxy card?
If you
receive more than one proxy card, it means that you hold shares registered in
more than one name or brokerage account. You should sign and return all proxies
for each proxy card that you receive in order to ensure that all of your shares
are voted.
Who will count the proxy
votes?
Our transfer agent, American
Stock Transfer & Trust Company, will count the proxy votes.
Where can I find voting results
of the Annual Meeting?
We will
announce preliminary voting results at the Annual Meeting. We will file with the
Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K
containing the final voting results within four business days of the Annual
Meeting or, if final results are not available at that time, within four
business days of the date on which final voting results become
available.
How will voting on any other
business be conducted?
We do not
expect any matters to be presented for a vote at the Annual Meeting other than
the matters described in this proxy statement. If you grant a proxy, either of
the officers named as proxy holder, Aaron D. Todd or Crystal L. Gordon or their
nominee(s) or substitute(s), will have the discretion to vote your shares on any
additional matters that are properly presented for a vote at the Annual Meeting.
If a nominee is not available as a candidate for Class I director, the person
named as the proxy holder will vote your proxy for another candidate nominated
by our Board of Directors.
What rights of appraisal or
similar rights of dissenters do I have with respect to any matter to be acted
upon at the meeting?
No action is
proposed herein for which the laws of the State of Delaware or our bylaws
provide a right to our stockholders to dissent and obtain appraisal of, or
payment for, such stockholders’ common stock.
The Company will furnish a copy of any
exhibit to the Form 10-K to any stockholder upon payment of the Company’s
reasonable expenses in furnishing such exhibit(s). Interested parties may
request a copy of
any exhibit to the Form 10-K from the
Secretary of the Company at the Company’s principal offices, 7211 South Peoria
Street, Englewood, Colorado 80112.
|
Continues on next page
►
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|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
3
|
Table of
Contents
|
|
Proposal No. 1 –
Election of Directors
|
Introduction
Our Board of Directors currently is
comprised of twelve directors, divided among three classes, with five directors
in Class I, four directors in Class II, and three directors in Class III. Class
II directors hold office for a term expiring at the 2017 Annual Meeting; Class
III directors hold office for a term expiring at the 2018 Annual Meeting; and
Class I directors’ term will expire at the 2016 Annual Meeting to be held on May
18, 2016.
Our Board of Directors has nominated C.
David Kikumoto, the Honorable Jessica L. Wright, Major General (Ret.), and
Joseph E. Whitters to serve as the Class I directors for three-year terms
expiring at the Annual Meeting in the year 2019 or until their successors have
been duly elected and qualified, or until the earlier of their respective
deaths, resignations or retirement. George W. Belsey, who has served on the
Board of Directors since 1992, and Major General Carl H. McNair, USA (Ret.), who
has served on the Board of Directors
since 1996, who are both Class I directors, previously notified the Board of
Directors of their intention to retire at the end of their current terms (which
are set to expire immediately prior to the 2016 Annual Meeting). Upon Mr. Belsey
and General McNair’s retirement, the number of members of our Board of Directors
will decrease from twelve directors to ten directors, divided among three
classes, with three directors in Class I, four directors in Class II, and three
directors in Class III.
The principal occupation and certain
other information regarding the nominees and the other directors whose terms of
office will continue after the Annual Meeting can be found beginning on page 6.
Information about the share ownership of the nominees and other directors can be
found beginning on page 43.
Assuming the presence of a quorum and
subject to our Uncontested Elections Policy, the three persons receiving the
highest number of “
FOR
” votes from stockholders in the election of directors at the
Annual Meeting will be elected. Cumulative voting is not permitted in the
election of directors. Consequently, each stockholder is entitled
to one vote for each share of common
stock held in the stockholder’s name. In the event that any nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as the Board of
Directors may propose.
Recommendation of the Board of Directors
The Board of Directors recommends a
vote “FOR” the proposal to elect each of C. David Kikumoto, the Honorable
Jessica L. Wright, Major General (Ret.) and Joseph E. Whitters as Class I
directors on our Board of Directors.
4
Table of
Contents
|
|
Directors and
Named Executive Officers
|
Summary information concerning the
Company’s directors and executive officers is set forth below:
|
|
Name
|
Age
|
|
Position
|
|
Class/
Year
Term of
Office
Expires
(1)
|
|
|
|
Ralph J. Bernstein
|
58
|
|
Director
|
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III/2018
|
|
|
|
Mark D. Carleton
|
55
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|
Director
|
|
III/2018
|
|
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|
John J. Connolly, Ed.D.
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76
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|
Director
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II/2017
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|
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|
Jeffrey A. Dorsey
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67
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|
Director
|
|
II/2017
|
|
|
|
Claire M. Gulmi
|
62
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|
Director
|
|
III/2018
|
|
|
|
C. David Kikumoto
|
66
|
|
Chairman of the Board
|
|
I/2016*
|
|
|
|
Morad Tahbaz
|
60
|
|
Director
|
|
II/2017
|
|
|
|
Aaron D. Todd
|
54
|
|
Director and Chief Executive
Officer
|
|
II/2017
|
|
|
|
MG Jessica L. Wright, USA (Ret.)
|
63
|
|
Director
|
|
I/2016*
|
|
|
|
Joseph E. Whitters
|
58
|
|
Director
|
|
I/2016*
|
|
|
|
Michael D. Allen
|
53
|
|
President, Domestic Air Medical
Services
|
|
N/A
|
|
|
|
Trent J. Carman
|
55
|
|
Chief Financial Officer and
Treasurer
|
|
N/A
|
|
|
|
David M. Doerr
|
46
|
|
EVP, Business Development
|
|
N/A
|
|
|
|
Crystal L. Gordon
|
37
|
|
General Counsel, Secretary, and Senior Vice
President
|
|
N/A
|
|
|
*
|
Director
nominee.
|
|
(1)
|
Refers to the
calendar year in which the Annual Meeting of stockholders is expected to
be held and at which the term of the pertinent director class shall
expire.
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
5
|
Table of
Contents
Below, you can find the principal
occupation and other information about each of the Company’s continuing
directors, director nominees, and executive officers.
Director
Nominees – Class I Directors
C. DAVID KIKUMOTO has served on the
Board of Directors since June 2004. Mr. Kikumoto is the co-founder and Chief
Executive Officer of Denver Management Advisors and is a nationally recognized
healthcare expert. He has an in-depth understanding of the financial dynamics of
the healthcare insurance industry and is considered an expert in assisting
companies and trust funds in lowering their healthcare costs. Mr. Kikumoto has a
total of 26 years of experience in the health and welfare benefits area. He was
the President and Vice Chairman of the Board at Anthem Blue Cross and Blue
Shield of Colorado and Nevada, and CEO and Vice Chairman of Rocky Mountain
Healthcare, the holding company of Blue Cross and Blue Shield plans in Colorado,
New Mexico and Nevada. He led the merger of Blue Cross and Blue Shield to Anthem
resulting in the creation of one of the largest private foundations in the State
of Colorado. He received his Bachelor of Science degree in accounting from the
University of Utah, pursued graduate studies at the University of Utah,
graduated from the Executive Development Program at the University of Chicago,
and graduated from the National Association of Corporate Directors training. Mr.
Kikumoto is also very active in the non-profit sector, serving as a director on
the National Board of Volunteers of America, including serving two terms as
Board chair. He also serves on the Boy Scouts of America Board of Directors, and
served a term as President of the Greater Denver Area Boy Scouts of America. Mr.
Kikumoto also serves as a Board Director for Banner Healthcare, a multi-billion
dollar hospital system.
Other Public Company
Board Service:
None.
Recent Past Public
Company Board Service:
Corgenix (April 2006 –
March 2011).
Key Attributes,
Experience and Skills:
Mr. Kikumoto brings to
the Board of Directors, among his other skills and qualifications, significant
experience in the healthcare industry, as well as extensive management and
operations experience gained while serving in executive positions with Anthem
Blue Cross and Blue Shield. Additionally, given Mr. Kikumoto’s prior experience
and service on several other private company boards, he is versed on a number of
complex issues affecting the healthcare industry. In light of the foregoing, our
Board of Directors has concluded that Mr. Kikumoto should be re-elected as a
member of our Board of Directors.
Honorable JESSICA L. WRIGHT, Major
General (Ret.) has served on the Board of Directors since February 2016. General
Wright brings a wealth of leadership experience from her distinguished career.
She previously served as the Undersecretary of Defense for Personnel and
Readiness before retiring in early 2015. As the Undersecretary of Defense, she
served as the senior policy advisor to the Secretary of Defense on all matters
relating to recruitment, retention, pay and healthcare and benefits for the
uniformed members and civilians of the department. In addition, she had
supervisory responsibility for 32,000 personnel, the execution of an annual
budget of $43.6B, overall responsibility for the world-wide Defense Health
Programs which included 54 Hospitals, 350 Clinics, 280 Dental Clinics and
TRICARE management and its 9.6 million beneficiaries.
6
Table of Contents
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Directors and Named
Executive Officers
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During her first year as the
Undersecretary of Defense, she implemented the Defense Health Agency and
instituted 10 shared services across the Department of Defense medical
communities, resulting in significant savings. Prior to serving as
Undersecretary of Defense, General Wright was appointed as the Adjutant General
by the Governor of Pennsylvania in 2004. She also served as the National Guard
Bureau Chair for the Safety (Aviation/Ground) Committee for 54 States,
Territories and the District of Columbia. General Wright was the first female
Army Aviator in the Army National Guard and the first female Combat Aviation
Brigade Commander in the entire Army.
General Wright was recommended to the
Board of Directors to serve as a director of the Company by a third party search
firm in connection with a search conducted by the Board of Directors.
Other Public Company
Board Service:
None.
Recent Past Public
Company Board Service:
None.
Key Attributes,
Experience and Skills:
Honorable Jessica L.
Wright, Major General (Ret.) brings to the Board of Directors, among her other
skills and qualifications, proven leadership and strategic planning skills,
which she gained as a Senior Defense Official and retired Major General.
Further, she has a vast understanding of aviation, safety management systems and
the complexities associated with government sponsored healthcare programs. In
light of the foregoing, our Board of Directors has concluded that the Honorable
Jessica L. Wright, Major General (Ret.) should be re-elected as a member of our
Board of Directors.
|
|
Joseph E.
Whitters
|
JOSEPH E. WHITTERS is an Executive Partner
of Frazier Healthcare Partners, an investment firm. In addition to his oversight
of several private companies in Frazier’s portfolio, Mr. Whitters has served on
many public company boards, including those of Mentor Corporation, Solexa,
Luminent and Omnicell. He currently serves on the boards of InfuSystems and PRGX
Global and, from 2014 until October 2015, was a director of Rural Metro
Corporation (and Chairman of its Audit Committee) until its acquisition by
Envision Healthcare.
Mr. Whitters joined the Board of Directors
in connection with a Cooperation Agreement executed by the Company and Voce
Capital Management LLC, a stockholder of the Company, dated March 22,
2016.
Other Public Company
Board Service:
InfuSystems and
PRGX
Recent Past Public
Company Board Service:
Omnicell
(2013).
Key Attributes,
Experience and Skills:
Mr. Whitters brings to
the Board of Directors, among his other skills and qualifications, extensive
operating and financial expertise in the healthcare industry. Further, Mr.
Whitters brings corporate governance expertise that he gained during his tenure
on several other public company boards. In light of the foregoing, our Board of
Directors has concluded that Mr. Whitters should be re-elected as a member of
our Board of Directors.
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Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
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7
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Table of Contents
Continuing Directors for Term Ending Upon the 2017 Annual Meeting of
Stockholders – Class II Directors
|
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Aaron D.
Todd
|
AARON D. TODD has served on the Board
of Directors since June 2002 and as Chief Executive Officer since July 2003. He
joined the Company as Chief Financial Officer in July of 1995 and was appointed
Secretary and Treasurer during that same year. Mr. Todd holds a Bachelor of
Science degree in Accounting from Brigham Young University.
Other Public Company Board
Service:
None.
Recent Past Public Company Board
Service:
None.
Key Attributes, Experience and
Skills:
Mr. Todd brings to the Board of
Directors, among his other skills and qualifications, a vast understanding of
financial and accounting matters, as well as significant knowledge and
understanding of our operations and the aviation and healthcare industries
generally. In light of the foregoing, our Board of Directors has concluded that
Mr. Todd should continue as a member of our Board of
Directors.
|
|
John J.
Connolly
|
Dr. JOHN J. CONNOLLY has served on the
Board of Directors since May 2012. He is the President and CEO of Castle
Connolly Medical Ltd., publisher of America’s Top Doctors. Dr. Connolly
previously served as President of New York Medical College, the nation’s second
largest private medical college, for more than ten years. He is CEO of Castle
Connolly Private Health Partners, LLC; Director of Castle Connolly Lifestream
MD; Director of Medebound LLC; Director of Dearborn Risk Management; Director of
the Northeast Business Group on Health; Director of Baker & Taylor. Dr.
Connolly is also a member of the NY Academy of Medicine, the NY Academy of
Science and The Presidents Advisory Council of the United Hospital Fund.
Other Public Company
Board Service:
None.
Recent Past Public
Company Board Service:
Morton’s Restaurant
Group, Inc. (2006-2012).
Key Attributes, Experience and
Skills:
Dr. Connolly brings to the Board of
Directors, among his other skills and qualifications, insight into the dynamics
of the evolving healthcare industry and financial expertise gained during his
work with Castle Connolly Medical Ltd. Dr. Connolly also has extensive corporate
governance experience, which he gained during his service on the Board of
Directors of Morton Restaurant Group, Inc. In light of the foregoing, our Board
of Directors has concluded that Dr. Connolly should continue as a member of our
Board of Directors.
8
Table of Contents
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|
Directors and Named
Executive Officers
|
|
|
|
|
Jeffrey A.
Dorsey
|
JEFFREY A. DORSEY has served on the Board
since May 2012. He began his career at Portsmouth General Hospital in 1972.
Following work as a senior administrator at Virginia Beach General Hospital, Mr.
Dorsey joined Hospital Corporation of America (HCA) in 1980 and worked for them
as an Administrator in Terre Haute, Indiana, Riyadh, Saudi Arabia, Emporia,
Kansas and Denver, Colorado where in 1995 he helped form and served as President
and Chief Executive Officer of HealthONE LLC. Mr. Dorsey most recently served as
the President and Chief Executive Officer of the HCA Continental Division,
including operations in Oklahoma, Kansas, and HCA-HealthONE LLC, the largest
healthcare system in the metro-Denver area with 8,500 employees and
3,000-affiliated physicians.
Other Public Company
Board Service:
None.
Recent Past Public
Company Board Service:
None.
Key Attributes,
Experience and Skills:
Mr. Dorsey brings to
the Board of Directors, among his other skills and qualifications, a vast
understanding of the healthcare industry and insight into the dynamics of the
evolving healthcare industry. Further, as a result of Mr. Dorsey’s service in
senior management positions at various healthcare systems, he has an
understanding of the operations of a healthcare company. In light of the
foregoing, our Board of Directors has concluded that Mr. Dorsey should continue
as a member of our Board of Directors.
|
Photograph unavailable
|
|
Morad
Tahbaz
|
MORAD TAHBAZ has served on the Board of
Directors since February 1994. He is a co-founder and General Partner of
Americas Partners, an investment firm. Additionally, Mr. Tahbaz is the founder
and a partner of M.T. Capital, L.L.C., an investment company for real estate and
private equity transactions. Mr. Tahbaz received his Bachelor’s degree in
Philosophy and Fine Arts from Colgate University and attended the Institute for
Architecture and Urban Studies in New York City. He holds a Master’s degree in
Business Administration from Columbia University Graduate School of Business.
Other Public Company Board
Service:
None.
Recent Past Public Company Board
Service:
None
Key Attributes, Experience and
Skills:
Mr. Tahbaz brings to the Board of
Directors, among his other skills and qualifications, valuable strategic
planning and management skills gained as a General Partner of Americas Partners,
as well as extensive institutional knowledge of the Company’s business and
operations. In light of the foregoing, our Board of Directors has concluded that
Mr. Tahbaz should continue as a member of our Board of
Directors.
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Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
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9
|
Table of
Contents
Continuing Directors for Term Ending Upon the 2018 Annual Meeting of
Stockholders – Class III Directors
|
Photograph unavailable
|
|
Ralph J.
Bernstein
|
RALPH J. BERNSTEIN has served on the
Board of Directors since February 1994. He is the Managing General Partner of
Bernstein Capital, LLC, focused on multi-strategy investing with emphasis on
building value in public and private companies and real estate. Mr. Bernstein
was the Founder and co-Managing Partner of The New York Land Company, Americas
Tower Partners and Americas Partners, developing and investing in office and
retail properties in New York and London, actively investing in public and
private equity and venture capital. He holds a Bachelor of Arts Degree in
Economics from the University of California at Davis.
Other Public Company
Board Service:
None.
Recent Past Public
Company Board Service:
Empire Resorts, Inc.
(2004 – 2010).
Key Attributes,
Experience and Skills:
Mr. Bernstein brings
to the Board of Directors, among his other skills and qualifications, valuable
strategic planning and management skills gained as a General Partner of
Bernstein Capital, LLC. In addition and as a result of Mr. Bernstein’s prior
service on our Board of Directors, Mr. Bernstein has a vast amount of
institutional knowledge regarding the Company’s operations and business
generally. In light of the foregoing, our Board of Directors has concluded that
Mr. Bernstein should continue as a member of our Board of
Directors.
|
|
|
Mark D.
Carleton
|
MARK D. CARLETON has served on the Board of Directors
since August 2008 and has been a Senior Vice President at Liberty Media
Corporation since December 2003 and Chief Development Officer since December
2015. His primary responsibilities include corporate development and oversight
of Liberty’s technology, music, telecom, satellite and sports interests. Prior
to joining Liberty Media Corporation, Mark was a partner at KPMG LLP, where he
had overall responsibility for the communications sector. Mr. Carleton was also
a member of KPMG LLP’s Board of Directors. Mr. Carleton received a Bachelor of
Science degree in Accounting from Colorado State University, where he currently
is a member of the College of Business Global Leadership Council. He also is a
member of the University of Colorado Sports and Entertainment Advisory Council.
In addition, Mr. Carleton was the Executive in Residence at the Colorado State
University Business School for the 2011-2012 school year. Mr. Carleton also
serves on the Board of Directors for Junior Achievement-Rocky Mountain,
Inc.
Other Public Company
Board Service:
Live Nation Entertainment
(January 2010 – present), Barnes & Noble, Inc. (September 2011 – present),
Mobile Streams, Inc. (January 2006 – present), and Sirius XM Radio (February
2013 – present).
Recent Past Public
Company Board Service:
The DIRECTV Group,
Inc. (February 2008 – June 2009), Ticketmaster Entertainment (August 2008 –
February 2010), and Ideiasnet (July 2011 – March 2015).
Key Attributes,
Experience and Skills:
Mr. Carleton brings to
the Board of Directors, among his other skills and qualifications, financial and
accounting expertise acquired while serving as a partner at KPMG LLP. In
addition, Mr. Carleton’s service on other public company boards has provided him
with a number of skills including leadership development and succession
planning, risk assessment, and governance expertise. In light of the foregoing,
our Board of Directors concluded that Mr. Carleton should continue as a member
of our Board of Directors.
10
Table of Contents
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|
Directors and Named
Executive Officers
|
|
|
|
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|
Claire M.
Gulmi
|
CLAIRE M. GULMI has served on the Board of
Directors since March 2015. Ms. Gulmi is a seasoned healthcare executive and has
served since 1994 as the Chief Financial Officer of AmSurg Corp., a nationally
recognized leader in development, management and operation of outpatient surgery
centers. During her tenure with AmSurg Corp. she also served as the Executive
Vice President since 2006 and Secretary since 1997. Prior to her appointment as
Executive Vice President with AmSurg Corp., Ms. Gulmi served as a Senior Vice
President from 1997 to 2006 and as a Vice President from 1994 through 1997. Ms.
Gulmi has a BBA in Accounting and Finance from Belmont University. Ms. Gulmi is
the past Board Chair of the YWCA of Nashville, serves on the boards of the Frist
Center for the Visual Arts and Nashville Public Radio. Ms. Gulmi has served as
Board Chair for the Bethlehem Centers of Nashville and has served on the boards
of the Girl Scouts, the American Heart Association and All About Women. Ms.
Gulmi has been named by the Nashville Business Journal as one of its Healthcare
100, was one of the 2007 winners of the Nashville Business Journal’s Women of
Influence and in 2011 received the Nashville Business Journal’s CFO Lifetime
Achievement Award.
Other Public Company
Board Service:
AmSurg Corp. (May 2015 –
present)
Recent Past Public
Company Board Service:
None.
Key Attributes,
Experience and Skills:
Ms. Gulmi brings to
the Board of Directors, among her other skills and qualifications, extensive
experience in finance and accounting and the healthcare industry. In addition,
her service on the AmSurg Corp. Board of Directors has provided her with insight
into various issues addressed by public company boards, including issues
specific to public company healthcare companies. In light of the foregoing, our
Board of Directors concluded that Ms. Gulmi should continue as a member of our
Board of Directors.
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
11
|
Table of Contents
Named
Executive Officers*
|
|
|
Michael D.
Allen
|
MICHAEL D. ALLEN was named President,
Domestic Air Medical Services in August 2012. Mr. Allen has been with Air
Methods since 1992 and served in several positions including line pilot, safety
representative, aviation site manager, training captain/check airman, operations
manager and Senior Vice President. As the President, Domestic Air Medical
Services Mr. Allen has responsibility and oversight of all business, aviation,
maintenance, clinical and dispatch operations supporting 320 air medical base
sites with over 3,350 employees and more than 400 aircraft. Prior to joining the
Company, Mr. Allen worked for Petroleum Helicopters, Inc. and served in the US
Army. During his more than five years of service in the US Army, Mr. Allen
served in Germany as an aero scout pilot and as a maintenance test pilot.
Mr. Allen graduated from Portland State University with a Bachelor of Science in
Mathematics.
|
|
|
Trent J.
Carman
|
TRENT J. CARMAN joined the Company in
April 2003 and is the Chief Financial Officer and Treasurer. Prior to joining
the Company, Mr. Carman served as Chief Financial Officer of StorNet, Inc. from
January 2000 until April 2003, and served in various capacities including Senior
Vice President and Chief Financial Officer for United Artists Theatre Circuit,
Inc., from June 1992 until January 2000. Mr. Carman received his Bachelor of
Science degree in Accounting from Utah State University and holds a Master’s
degree in Business Administration-Finance from Indiana
University.
|
|
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David M.
Doerr
|
DAVID M. DOERR joined the Company as
Executive Vice President, Business Development in October 2013. Prior to joining
the Company, Mr. Doerr had obtained more than 20 years of experience including
over 17 years in the healthcare industry in financial, operational and general
management positions, including as Vice President of Global Business Development
for Gambro AB, a Swedish healthcare company where he also served in various
senior management roles in finance, operations and business development. Prior
to Gambro, Mr. Doerr worked for PricewaterhouseCoopers within its audit and
assurance practice. David received his Bachelor of Science, Accounting,
with distinction
– from Indiana University School of Business in May 1992 and his CPA in
1993.
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Crystal L.
Gordon
|
CRYSTAL L. GORDON was appointed as
General Counsel, Corporate Secretary and Senior Vice President of the Company in
2012. Prior to her appointment, Ms. Gordon was the Vice President and Associate
General Counsel of the Company. Before joining the Company in April 2011,
Ms. Gordon was with Davis Graham & Stubbs LLP in Denver, Colorado focusing
on mergers and acquisitions, securities offerings, SEC compliance matters, and
corporate governance. Ms. Gordon received her law degree from the University of
Denver, and received her Bachelor of Science degree in Biology from Santa Clara
University. Prior to attending law school, Ms. Gordon worked as a compliance
associate with a boutique investment advisory firm in Northern
California.
|
*
|
Biographical information for Mr.
Aaron D. Todd, our Chief Executive Officer, is set forth above under
Continuing Directors for Term ending upon the 2017 Annual Meeting of
Stockholders – Class II Directors.
|
12
Table of Contents
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|
Corporate Governance and
Board Matters
|
Board of Directors and
Governance Principles
The core responsibility of the
Company’s Board of Directors is to exercise its business judgment to act in what
it reasonably believes to be in the best interests of the Company and its
stockholders. Further, members of the Board of Directors fulfill their
responsibilities consistent with their fiduciary duty to the stockholders, and
in compliance with all applicable laws and regulations. The primary
responsibilities of the Board of Directors include:
|
●
|
Oversight of management
performance and assurance that stockholder interests are
served;
|
|
●
|
Oversight of the Company’s
business affairs and long-term strategy, including Chief Executive Officer
succession planning; and
|
|
●
|
Monitoring adherence to the
Company’s standards and policies, including, among other things, policies
governing internal controls over financial
reporting.
|
Corporate Governance Guidelines &
Uncontested Elections Policy
In fulfilling such responsibilities,
the Board of Directors is guided by the principles set forth in the Corporate
Governance Guidelines, a copy of which is available on our website
www.airmethods.com
under the “Investors” tab. The Corporate Governance Guidelines were
adopted by the Board of Directors in May 2010, and were most recently revised in
August 2015. To ensure sound corporate governance practices, the Board of
Directors regularly reviews the governance practices set forth in the Corporate
Governance Guidelines, as well as Delaware law (the state in which we are
incorporated), the listing standards of The NASDAQ
®
Stock Market, and
SEC regulations. The Board of Directors also considers best practices suggested
by recognized corporate governance authorities.
In an effort to continue to demonstrate
good governance, the Corporate Governance Guidelines include an Uncontested
Elections Policy (the “Policy”). Under the
Policy, any nominee for director in
an uncontested election who receives a greater number of “withhold” votes than
“for” votes will submit to the Board of Directors a letter of resignation for
consideration by the nominating and governance committee. The nominating and
governance committee will promptly consider the tendered resignation and will
recommend to the Board of Directors whether or not to accept the tendered
resignation or to take other action, such as rejecting the tendered resignation
and addressing the apparent underlying causes of the “withhold” votes in a
different way.
In making this recommendation, the
nominating and governance committee will consider all factors deemed relevant by
its members. These factors may include the underlying reasons for stockholders’
withholding of votes from such director nominee (if ascertainable), the length
of service and qualifications of the director whose resignation has been
tendered, the director’s contributions to the Company, whether the Company will
remain in compliance with applicable laws, rules, regulations and governing
documents if it accepts the resignation and, generally, whether or not accepting
the resignation is in the best interests of the Company and our stockholders. In
considering the nominating and governance committee’s recommendation, the Board
of Directors will take into account the factors considered by the nominating and
corporate governance committee and such additional information and factors as
the Board of Directors believes to be relevant.
Code of Business Conduct for Members of
the Board of Directors
The Board of Directors also performs
its responsibilities in accordance with the Code of Business Conduct for Members
of the Board of Directors adopted on November 2, 2011 (the “Director Code of
Conduct”). A copy of the Director Code of Conduct is available on our website
www.airmethods.com
under the “Investors” tab.
Board Leadership Structure and
Independent Chairman
The Board of Directors separated the
positions of Chairman and Chief Executive Officer in July 2003. Maintaining
separate positions allows our Chief Executive Officer to focus on developing and
implementing the
Company’s business plans and
supervising the Company’s day-to-day business operations and allows our Chairman
to lead the Board of Directors in its oversight and advisory roles. Because of
the many responsibilities
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Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
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13
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Table of Contents
of the Board of Directors and the
significant time and effort required by each of the Chairman and the Chief
Executive Officer to perform their respective duties, the Company believes that
having separate persons in these roles enhances the ability of each to discharge
those duties effectively and, as a corollary, enhances the Company’s prospects
for success. The Board of Directors also believes that having separate positions
provides a clear delineation of responsibilities for each position and fosters
greater accountability of management. At this time,
the Board of Directors has determined for
the foregoing reasons that its leadership structure is appropriate and in the
best interests of the Company’s stockholders. The Company will continue to
periodically evaluate whether this leadership structure best serves the Company
and its stockholders.
The Board of Directors regularly holds
executive sessions with directors who are all independent, as defined under
applicable NASDAQ
®
rules and regulations.
Our Board of Directors, together with our
named executive officers, oversees the management of risks inherent in the
operation of the Company’s businesses and the implementation of its strategic
plan. The Board of Directors performs this oversight role by reviewing the
operations of the Company’s business and corporate functions and addressing the
primary risks associated therewith. The Board of Directors has delegated certain
responsibilities to the finance and strategic planning committee and the audit
committee, including, among other things, reviewing the risks associated with
the Company’s strategic plan, discussing policies with management regarding
financial risk assessment and enterprise risk management, developing guidelines
to govern the process by which major financial and accounting risk assessment is
undertaken by the Company, identifying the primary risks to the Company’s
business and interim updates of those risks, and monitoring and evaluating the
primary risks associated with particular business units and
functions.
In an effort to continue appropriately
monitoring and understanding the Company’s risks, in 2012, the Board of
Directors formed the healthcare affairs committee, which until 2015 was a
subcommittee of the finance and strategic planning committee. The healthcare
affairs
committee is now a committee of the Board
of Directors and is comprised of members with a strong background in healthcare.
The healthcare affairs committee focuses on healthcare matters impacting the
Company, including the Company’s healthcare compliance efforts. Since the
formation of the healthcare affairs committee, the committee has focused on,
among other things, the Company’s healthcare compliance plan and management of
risks related to healthcare.
In performing such functions, the audit
committee, the finance and strategic planning committee, and the healthcare
affairs committee have full access to management, as well as the ability to
engage advisors. The foregoing committees provide reports to the Board of
Directors regarding the risk areas identified above. In addition, the
compensation committee and the nominating and governance committee address
relevant risks during their respective meetings. The Board of Directors believes
that the work undertaken by the audit committee, the finance and strategic
planning committee and the healthcare affairs committee, together with the work
of the full Board of Directors, the other committees, and our named executive
officers, enables the Board of Directors to effectively oversee the Company’s
risk management.
Board Membership and Director Independence
Currently, the Company’s Board of
Directors has twelve members. The Board of Directors has determined that eleven
of those twelve directors, namely Chairman Kikumoto, Mmes. Gulmi and Wright, Dr.
Connolly and Messrs. Belsey, Bernstein, Dorsey, Carleton, McNair, Tahbaz and
Whitters, satisfy The NASDAQ
®
Stock Market standard for director
independence. The Board of Directors has determined that Mr. Todd, as our Chief
Executive Officer is not independent under The NASDAQ
®
Stock Market
standard for director independence.
14
Table of Contents
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Corporate Governance and
Board Matters
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The Board of Directors held six meetings
in 2015. Each director attended 100% of the Board meetings during 2015 (during
the period for which such person was a director) and 75% of the committee
meetings on which each director served (during the period for which such person
was a member of such committee). Other than The Honorable Jessica L. Wright,
Major General (Ret.) and Mr. Joseph E. Whitters who were appointed to the Board
of Directors in 2016, all of the members of the Board of Directors attended the
Company’s 2015 Annual Meeting. The Board of Directors does not have a policy for
Board member attendance at the Company’s annual meeting of
stockholders.
Our Board of Directors conducts its
business through meetings of the Board of Directors and through activities of
the standing committees, as further described below. The Board of Directors and
each of the standing committees meets throughout the year on a set schedule and
also holds special meetings and acts by written consent from time to time, as
appropriate. Board of Directors’ agendas include regularly scheduled executive
sessions of the independent directors to meet without the presence of
management. The Board of Directors has delegated various responsibilities and
authority to different committees of the Board of Directors, as described below.
Members of the Board of Directors have access to all of our members of
management outside of Board of Directors’ meetings.
Committees of the Board of Directors
The Board of Directors has established
an audit committee, finance and strategic planning committee, compensation
committee, a healthcare affairs committee and a nominating and governance
committee. Each of the committees regularly report on their activities and
actions
to the full Board of Directors. The
charters for the audit committee, the compensation committee, the healthcare
affairs committee and the nominating and governance committee are available on
the Company’s website at
www.airmethods.com
.
2015 Board Committee
Membership
|
Director
|
|
Audit
|
Financial &
Strategic Planning
|
Compensation
|
Healthcare Affairs
|
Nominating &
Governance
|
|
George W. Belsey
|
|
|
|
|
|
|
|
Ralph J.
Bernstein
|
|
|
|
|
|
|
|
Mark D. Carleton
|
|
|
|
|
|
|
|
John J. Connolly
|
|
|
|
|
|
|
|
Jeffery A. Dorsey
|
|
|
|
|
|
|
|
Claire M. Gulmi
|
|
|
|
|
|
|
|
C. David Kikumoto
|
★
|
|
|
|
|
|
|
Carl H. McNair
|
|
|
|
|
|
|
|
Morad Tahbaz
|
|
|
|
|
|
|
|
Aaron D. Todd
|
|
|
|
|
|
|
|
Number of meetings in
2015
|
|
5
|
8
|
6
|
4
|
6
|
|
★
-
Chairman of the Board
|
|
- Committee
Member
|
|
-
Chairperson
|
The audit committee, which met five
times during 2015, currently consists of Ms. Gulmi (Chair), Messrs. McNair (who
will not continue as a director following the Annual Meeting) and Carleton and
Dr. Connolly. The Board
has determined that all members of the
audit committee are “independent” within the meaning of the listing standards of
The NASDAQ
®
Stock Market and the SEC rules governing audit
committees. In addition, the Board
|
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|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
15
|
Table of Contents
of Directors determined that Mr.
Carleton, Dr. Connolly and Ms. Gulmi meet the criteria of an “audit committee
financial expert” as defined under the applicable SEC rules.
See the “Audit Committee Report” on page
48 for a description of the audit committee’s duties and
responsibilities.
Finance and Strategic Planning Committee
The finance and strategic planning
committee was formed by the Board of Directors in April 2003. The current
members of the finance and strategic planning committee are Messrs. Tahbaz
(Chair), Bernstein, Carleton and Todd. The finance and strategic planning
committee oversees establishment and achievement of corporate
financial objectives and key growth
initiatives, including acquisitions that are significant to the Company’s
business. In addition, the committee analyzes and evaluates the capital
structure of the Company. The finance and strategic planning committee met eight
times in 2015.
The compensation committee currently
consists of Messrs. Carleton (Chair), Bernstein and Dorsey. The compensation
committee, which met six times in 2015, is responsible for making
recommendations to the Board of Directors regarding executive compensation
matters. The specific nature of the compensation committee’s responsibilities is
described under “Compensation Discussion and Analysis.”
The Board of Directors has determined
that all members of the compensation committee are “independent” within the
meaning of The NASDAQ
®
Stock Market’s listing standards.
Nominating and Governance Committee
The nominating and governance committee
currently consists of Messrs. Bernstein (Chair), Belsey (who will not continue
as a director following the Annual Meeting) and Tahbaz. The nominating and
governance committee provides committee membership recommendations to the Board
of Directors along with changes to those committees. In addition, the nominating
and governance committee identifies, evaluates and recommends to the Board of
Directors individuals, including individuals proposed by stockholders, qualified
to serve as members of the Board of Directors. The nominating and governance
committee also identifies, evaluates and recommends to the Board of Directors,
nominees for election as directors
of the Company at the next annual or
special meeting of stockholders at which directors are to be elected. The
nominating and governance committee also develops and recommends to the Board of
Directors corporate governance principles applicable to the Company and oversees
succession planning for the chief executive officer. The nominating and
governance committee met six times in 2015.
The Board of Directors has determined that
all members of the nominating and governance committee are “independent” within
the meaning of The NASDAQ
®
Stock Market’s listing
standards.
Healthcare Affairs Committee
The healthcare affairs committee
currently consists of Dr. Connolly (Chair), Ms. Gulmi and Messrs. Belsey and
Dorsey. The healthcare affairs committee met four times in 2015 and is
responsible for (i) assisting the Board with certain strategic decisions
regarding healthcare related opportunities, and (ii) providing input on health
care trends and the potential impact thereof on the
Company. In addition, the healthcare
affairs committee works in cooperation with the audit committee to provide
oversight of significant healthcare related and regulatory compliance
issues.
16
Table of Contents
|
Corporate Governance and
Board Matters
|
|
|
In accordance with its written charter,
the nominating and governance committee investigates suggestions for candidates
for membership on the Board of Directors, including candidates nominated by our
stockholders, and recommends prospective directors, as required, to provide an
appropriate balance of knowledge, experience and capability on the Board of
Directors.
Directors may be nominated by the Board of
Directors or by stockholders in accordance with our Bylaws. The specific
requirements for such a nomination are described in this proxy statement under
“Stockholder Proposals.”
In recommending candidates (including
candidates nominated by our stockholders in accordance with our Bylaws) for
appointment or re-election to the Board of Directors, the nominating and
governance committee considers the appropriate balance of experience, skills and
characteristics required of the Board of Directors. Specifically, the nominating
and governance committee considers, among other things, the candidate’s
independence, character, corporate governance skills and abilities, business
experience, industry specific experience, training and education, commitment to
performing the duties of a director, and other skills, abilities or attributes
that fill specific needs of the Board of Directors or its committees. While
there is no
formal policy with regard to consideration
of diversity in identifying director nominees, the nominating and governance
committee considers diversity in business experience, professional expertise,
gender and ethnic background, along with various other factors when evaluating
director nominees.
In addition, the nominating and governance
committee seeks to ensure that at least a majority of the directors are
independent under the rules of The NASDAQ
®
Stock Market, and that
members of the Company’s audit committee meet the financial literacy and
sophistication requirements under The NASDAQ
®
Stock Market rules and
at least one of them qualifies as an “audit committee financial expert” under
the rules of the SEC. Nominees for director are selected on the basis of their
depth and breadth of experience, integrity, ability to make independent
analytical inquiries, understanding of the Company’s business environment and
willingness to devote adequate time to Board of Directors’ duties.
In determining whether to recommend a
director for re-election, the nominating and governance committee considers,
among other things, the director’s past attendance at meetings and participation
in and contributions to the activities of the Board of
Directors.
Key Features of our
2015 Executive Compensation Program
The compensation committee
(“committee”) has structured the executive compensation program to include key
features that align the interests of the named executive
officers with stockholders and the
Company’s long-term strategic direction. The program includes governance
practices that support this alignment:
|
What We
Do
|
|
What We Don’t
Do
|
|
✓
|
Significant Emphasis on Performance-Based Pay
|
|
✕
|
No Hedging of Company Stock
|
|
✓
|
Capped Incentive Awards
|
|
✕
|
No
Option Repricing without Shareholder Approval
|
|
✓
|
Robust Stock Ownership Guidelines for Executive Officers
and Directors
|
|
✕
|
No Perquisites or Pension Plans
|
|
✓
|
Provide Reasonable Post-Employment and Change in Control
Provisions
|
|
✕
|
No
Tax Gross Ups
|
|
✓
|
Discourage Pledging of Company Stock and Require
Pre-Approval
|
|
|
|
22
Table
of Contents
|
|
Compensation Discussion and Analysis
|
|
|
Elements of the 2015 Executive Compensation
Program
We have three elements of total direct
compensation (“TDC”): base salary, performance-based annual bonuses (“STIP”) and
long-term incentive compensation (“LTI”). The
charts below reflect each compensation
component as a percentage of 2015 TDC (includes base salary, actual STIP and the
grant date fair value of the annual long-term incentive award for 2015) for the
Chief Executive Officer (“CEO”) and the other named executive
officers:
2015 CEO Pay
Decisions
|
Annual Bonus: 55% of base
salary
LTI Award: 150% of base salary
Salary: No annual
increase
Total Direct
Compensation:
2014: $4,758,394
2015:
$3,503,629
|
CEO Reported and
Realized Pay
Since the vast majority of reported pay
represents potential pay, we also look at pay actually realized each year, which
may include the value of long-term equity
compensation granted many years
earlier. The following graph shows reported pay included in the 2015 Summary
Compensation Table and the realized pay over the last three years. For the past
three years in the aggregate, realized pay for our CEO was 60% of reported
pay.
|
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|
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
23
|
Table of
Contents
REPORTED AND
REALIZED PAY (2013-2015)
|
(1)
|
Reported pay includes base
salary, actual annual incentive earned, the grant date fair value of
long-term equity compensation and all other compensation, each as reported
in the 2015 Summary Compensation Table on page 37.
|
|
(2)
|
Realized pay includes base
salary, actual annual incentive earned and all other compensation, each as
reported in the 2015 Summary Compensation Table on page 37, and the value
of stock options exercised or stock awards vested in the applicable
year.
|
Received Strong
Support For Our Named Executive Officer Compensation in 2015 “Say on Pay” Vote –
97% in Favor
CONSIDERATION
OF OUR 2015 SAY
ON PAY
RESULTS
|
Each year, the committee
considers the outcome of stockholder advisory votes on executive
compensation when making future decisions relating to the compensation of
the named executive officers and our executive compensation program and
policies.
Stockholders continued their
strong support of our executive compensation programs with 97% of the
votes cast for approval of the “say on pay” proposal at the 2015 Annual
Meeting of Stockholders. The committee believes that the voting results
conveyed our stockholders’ strong support of the philosophy, strategy and
objectives of our executive compensation programs. Accordingly, we did not
make any material changes to our compensation program in response to the
2015 say-on-pay vote.
Stockholders have overwhelmingly
supported the Company’s executive compensation programs since
2013.
|
24
Table of
Contents
|
|
Compensation Discussion and
Analysis
|
|
|
Overview
of Our Compensation Programs
Compensation
Philosophy
Our compensation programs are designed to
align the executives’ long-term interests with those of our stockholders by
rewarding for sustained financial and operating performance and leadership
excellence.
We believe that payment of the variable
compensation components of our executive compensation program should coincide
with increased value for our stockholders. For example, under our annual cash
incentive program a minimum level of corporate performance must be achieved
before any bonus is payable. Even if the minimum level is achieved, the
committee reserves the sole discretion to exercise negative discretion to the
extent it deems reasonable and prudent under the circumstances. In addition,
rewards earned through equity plans are linked to actual and relative growth in
our stock price.
The committee regularly reviews best
practices in governance and executive compensation to ensure that our programs
align with the committee’s compensation philosophy and are achieving the desired
results. The committee’s commitment to the foregoing is evidenced through the
actions it has undertaken in 2014 and 2015, including:
●
In 2014 the committee undertook a
comprehensive review and analysis of the Company’s compensation programs. As a
result of such review, the committee implemented (i) the use of performance
share units based on the Company’s total shareholder return over a three-year
period in 2014 and 2015 (and continued such practice in 2016); and (ii) in 2015,
used only performance-based long-term incentive equity vehicles (PSUs and
options).
●
In 2015, the committee retained a
new independent compensation consultant, Pay Governance LLC (“Pay Governance”)
to bring a new perspective into the committee’s review process of the Company’s
compensation programs.
●
In 2015, in connection with the
retention of Pay Governance, the committee sought additional feedback from Pay
Governance regarding the Company’s 2015 compensation programs. The review
included, among other things, peer group reviews and comparisons to industry
best practices. As a result of such review and recommendations, the committee
(i) modified the Company’s peer group for 2016;
(ii) decreased
the aggregate compensation paid to the Company’s directors in 2016; (iii)
modified our performance units to measure total shareholder return against the
Russell 2000 (an index measuring the performance of small-cap stocks), rather
than the Company’s Compensation Peer Group; and (iv) modified the allocation of
long-term equity awards to include restricted stock units with a performance
metric threshold requirement. For further discussion about the 2016 compensation
plan design and the respective changes, see “2016 Long-Term Incentive
Compensation.”
Compensation
Principles
The foregoing compensation philosophy is
implemented through the following guiding principles:
●
Attract, motivate and retain
executive officers capable of leading us to meet our business
objectives;
●
Encourage prudent risk taking by
our named executive officers;
●
Establish target compensation
levels that are competitive with those of other companies with which we compete
for executive talent;
●
Adequately compensate our named
executive officers for achieving important short-term
objectives;
●
Align the interests of named
executive officers and stockholders through the use of equity and other
long-term incentives; and
●
Reward sustained Company
performance and individual achievements by aligning a significant portion of
total compensation to the Company’s financial results and strategic
objectives.
How We Make
Compensation Decisions
Role of the Committee and Management in
Executive Compensation
The committee oversees the design and
administration of the Company’s compensation program and evaluates the program
against competitive practices, legal and regulatory developments and general
corporate governance trends. In the first quarter of each year, the committee
reviews the performance and total compensation of the named executive officers.
In addition, the committee reviews and establishes each named executive
officer’s total compensation target, which includes base salary, annual bonus
opportunities and long-term incentive awards for the current year.
|
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|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
|
25
|
Table of
Contents
The following summarizes the roles of each
of the key participants in the executive compensation decision-making process:
Compensation Committee
●
Acts on behalf of the Board of
Directors by setting the principles that guide the design of our compensation
and benefit programs
●
Sets the executive compensation
philosophy and composition of the peer group
●
Approves the setting of
competitive compensation target levels
●
Sets compensation programs and
principles that are designed to link executive pay with company and individual
performance
●
Approves CEO compensation,
which the full Board of Directors must then ratify
Pursuant to its charter, the compensation
committee is authorized to delegate any of its responsibilities to one or more
subcommittees to the extent permitted by applicable law and the Company’s
Certificate of Incorporation and Bylaws. The compensation committee did not
delegate any of its responsibilities in 2015.
Independent Members of the Board Of
Directors
●
Participate in the performance
assessment process for the CEO
●
Ratify the CEO’s
compensation
Chief Executive
Officer
●
Reviews and presents to
the committee the performance assessments and compensation recommendations for
each of the other named executive officers
As noted above, the committee makes all
base, bonus and equity compensation decisions regarding named executive
officers. In making such determinations, the committee relies on the
recommendations provided by Mr. Todd with respect to all of the other named
executive officers, as well as information provided by management with respect
to financial projections for the Company and divisional performance goals.
Management does interact with the
committee’s independent compensation consultant as necessary and prepares
materials for each committee meeting to assist the committee in its
consideration of executive compensation programs and policies and its
administration of the compensation program.
Role of Independent Compensation
Consultant
Our committee charter authorizes the
committee to engage independent legal and other advisors and consultants as it
deems necessary or appropriate to carry out its responsibilities. In 2015, the
committee engaged Pay Governance as its independent compensation consultant. The
committee considers analysis and advice from Pay Governance when making
compensation decisions and when making decisions on plan design. Specifically,
the committee relies on Pay Governance for, among other things:
●
Reviewing total compensation
strategy and pay levels for executives.
●
Performing competitive
analyses of non-employee director compensation.
●
Examining the executive
compensation programs to ensure they support the business
strategy.
The committee may request information or
advice directly from our compensation consultant and may direct the Company to
provide or solicit information from our compensation consultant. Representatives
of our compensation consultant regularly interact with representatives of the
Company. Representatives of our compensation consultant attended 2 of the 5
committee meetings during our 2015 fiscal year. Our compensation consultants
were paid $14,502 for services rendered during 2015. During 2015, neither of our
compensation consultants provided services to the Company unrelated to executive
compensation, had any business or personal relationships with the committee
members, or maintained policies and procedures designed to avoid conflicts of
interest.
Role of Comparative Compensation
Data
The committee utilizes the Compensation
Peer Group to help set executive compensation based upon compensation levels for
similarly situated executives within the Compensation Peer Group. To conduct
these comparisons, Pay Governance at least annually provides a compensation
comparison based on information that is derived from comparable businesses
(based primarily on revenue and market capitalization). This data is used as a
frame of reference for establishing compensation targets for base salary, annual
bonus and long-term incentives for executive officers.
The Compensation Peer Group consists of
healthcare, aviation, transportation, and logistics companies. The committee,
upon the recommendation of Pay Governance, chose this group because the
companies reflect the market in which we operate for executive talent and
because of
26
Table of
Contents
|
|
Compensation Discussion and
Analysis
|
|
|
each company’s relative leadership
position in its sector, relative size as measured by revenues, market valuation
and performance. The committee periodically reviews the Compensation Peer Group,
based on the Company’s size,
financial results, as well as other
pertinent attributes, and updates the Compensation Peer Group as appropriate in
order to accurately reflect the Company’s position within the
market.
The committee made the following
changes to the Compensation Peer Group for 2016:
|
REMOVED
|
|
|
|
Bio-Reference Laboratories
(acquired)
GATX Corp.
HEALTHSOUTH
Corp.
Knight Transportation Inc.
LifePoint Health, Inc.
Roadrunner
Transportation Systems, Inc.
Select Medical Holdings Corporation
UTi
Worldwide Inc.
|
In making the foregoing changes, the
committee considered whether: (i) the business model was similar enough to the
Company’s model to warrant inclusion as a peer; and (ii) the revenue generated
by the respective peer was within a range (.5x to 2.5x of the Company)
comparable to that of the revenue generated by the
|
ADDED
|
|
|
|
AMN Healthcare Services
Inc.
Echo
Global Logistics, Inc.
Envision Healthcare Holdings,
Inc.
Forward Air Corp.
Radiant Logistics,
Inc.
ERA Group,
Inc.
|
Company in the trailing twelve-month
period. Based on these key considerations and the recommendations of Pay
Governance, the Committee modified the 2016 Compensation Peer Group and such
group is now comprised of the following companies:
|
Ticker
|
|
Company Name
|
|
Ticker
|
|
Company Name
|
|
AHS
|
|
AMN Healthcare Services Inc.
|
|
HUBG
|
|
Hub Group, Inc.
|
|
ATSG
|
|
Air
Transport Services Group Inc.
|
|
LHCG
|
|
LHC
Group, Inc.
|
|
AMSG
|
|
AmSurg Corp
|
|
MD
|
|
Mednax Inc.
|
|
AAWW
|
|
Atlas Air Worldwide Holdings, Inc.
|
|
PHII
|
|
Phi, Inc.
|
|
BRS
|
|
Bristow Group Inc.
|
|
RLGT
|
|
Radiant Logistics, Inc.
|
|
ECHO
|
|
Echo Global Logistics
|
|
TMH
|
|
Team Health Holdings LLC
|
|
ERA
|
|
ERA Group, Inc.
|
|
VVI
|
|
Viad Corp
|
|
EVHC
|
|
Envision Healthcare Holdings Inc.
|
|
|
|
|
|
FWRD
|
|
Forward Air Corp.
|
|
|
|
|
|
HWAY
|
|
Healthways
|
|
|
|
|
|
HEI
|
|
HEICO Corporation
|
|
|
|
|
|
HGR
|
|
Hanger, Inc.
|
|
|
|
|
Specific Forms of Compensation and
the Role of Discretion
In the past, the committee has retained
the authority to review named executive officer base compensation and to make
increases in base compensation based on executive officer performance and
responsibilities and competitive compensation levels. Also, the committee has
the authority to recommend equity grants, which may be based on executive
performance and market norms. The committee retains the discretion to make
compensation decisions about named executive officer base compensation, levels
of stock option grants, and levels of restricted stock/restricted stock unit
grants, including the use of predetermined performance goals.
In addition, the committee sets the
performance targets and bonus potential in adopting annual bonus programs and
long-term cash incentive programs. Once performance periods are complete,
generally the plans pursuant to which such long-term cash incentives are awarded
provide the committee with the ability to apply negative discretion in making
the final awards. In addition, the adoption of the umbrella plan in connection
with the STIP provides the committee additional discretion in making final
awards once certain threshold performance is achieved, up to the maximums set
forth in the applicable STIP. Pursuant to the 2015 STIP and the 2016 STIP, if
less than the maximum amounts are awarded, the committee shall be deemed to have
|
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
27
|
Table of Contents
exercised its negative discretion in
establishing the award. For 2016 and future periods, the committee has not
determined whether it will exercise discretion to increase or reduce the size of
an award or payout, whether performance goals are satisfied or not.
The committee may make future grants of
options, restricted stock/restricted stock units, or other equity compensation,
subject to objective performance goals. At this time, it has not determined
whether it will exercise discretion to reduce the size of an award or payout
even if performance goals are met. However, the committee has no current
intention to increase the size of any objectively determined equity compensation
award, especially if performance goals are not met.
Components of Executive
Compensation
The committee has a practice of
annually reviewing the compensation program components, targets and payouts on
an annual basis to ensure our pay-for-performance alignment. The compensation
program is designed to incentivize responsible achievement of operating goals
over one and three-year periods, with targets and metrics selected because they
are directly linked to our strategic goals. Additionally, our long-term
incentives measure the creation of stockholder value through increases in stock
price.
Our executive compensation has three
primary elements, as shown in the following chart and described further
below:
|
|
Pay Element
|
|
Description and Purpose
|
|
Link to Business and Talent Strategies
|
|
|
|
Base Salary
|
|
●
Fixed cash compensation; reviewed annually and adjusted when
appropriate.
●
Commensurate with each named executive officer’s responsibilities,
experience and past performance.
|
|
●
To promote a performance culture, increases are not automatic or
guaranteed.
●
Competitive base salaries help attract and retain executive
talent.
|
|
|
|
Annual Incentives
(STIP)
|
|
●
Cash payments under the Executive Short Term Incentive Program,
established under the Performance Pay Plan.
●
The annual incentive rewards the achievement of short-term
objectives which should translate into value for the
stockholders.
|
|
●
Metrics and targets align with business strategy and include
financial targets (EPS, EBITDA and ROC) and other non-financial
objectives.
●
A portion of the award can be based on individual. accomplishments
and non-financial achievements.
|
|
|
|
Long-Term Incentives
(LTI)
|
|
●
Variable compensation payable in the form of equity awards (stock
options, restricted stock units and performance share units) for named
executive officers.
●
Designed to drive sustainable performance that delivers long-term
value to stockholders and directly ties the interests of named executive
officers to those of stockholders.
●
In 2015, the long-term incentive compensation currently consists of
stock options to purchase our common stock (“stock options”) under our
2015 Equity Incentive Plan (the “2015 Plan”) and performance share units
awarded under the Performance Pay Plan. In 2016, 25% of the long-term
equity grants consisted of restricted share units instead of options
subject, however, to a performance metric threshold
requirement.
●
Stock options and RSUs generally vest ratably over three years;
PSUs generally vest 100% after a 2-3 year performance
period.
|
|
●
Multi-year vesting of awards assists in motivation and retention of
key talent.
●
Stock Options – provide direct alignment to, and focus on, stock
price appreciation.
●
Performance Share Units – directly tied to long-term interests of
stockholders. through relative total stockholder return
(TSR).
|
|
Base
Salary
The annual base salary component of
each named executive officer’s compensation provides each individual with a
fixed level of annual cash compensation. Base pay is set by the committee in an
amount which is adequate to attract, motivate and retain the best talent for the
Company’s needs. The amount of base salary payable to each named executive
officer is commensurate with each executive’s responsibilities, experience and
past
performance, and also takes into
consideration peer and competitive data. Base pay is not utilized by the Company
to reward outstanding individual and/or corporate performance, which is instead
accomplished through our short-term and long-term incentive plans. There are
three situations that may warrant an adjustment to base salary: (i) annual merit
increases; (ii) promotions or changes in role; or (iii) market adjustments. No
increase in base salary is automatic or guaranteed.
28
Table of Contents
|
|
Compensation Discussion and Analysis
|
|
|
The following table shows our named
executive officers’ respective base salaries for 2015 and 2014:
|
|
Name
|
|
2014 Base
Salary
|
|
2015 Base
Salary
|
|
% Change
|
|
|
|
Aaron D. Todd, Chief Executive
Officer
|
|
$
|
765,000
|
|
$
|
765,000
|
|
0%
|
|
|
|
Michael D. Allen, President, Domestic
Air Medical Services
|
|
$
|
459,000
|
|
$
|
459,000
|
|
0%
|
|
|
|
Trent J. Carman, Chief Financial
Officer & Treasurer
|
|
$
|
408,000
|
|
$
|
408,000
|
|
0%
|
|
|
|
David M. Doerr, EVP, Business
Development
|
|
$
|
408,000
|
|
$
|
408,000
|
|
0%
|
|
|
|
Crystal L. Gordon, General
Counsel, Secretary, and Senior Vice President
|
|
$
|
331,500
|
|
$
|
331,500
|
|
0%
|
|
Annual Incentive –
Executive Short Term Incentive Plan
The Executive Short Term Incentive Plan
(the “STIP”) is an annual incentive program which is adopted pursuant to the
Company’s Performance Pay Plan, a stockholder-approved incentive plan. This plan
is our primary vehicle for regularly recognizing Company and individual
performance. We believe that measuring and rewarding performance on an annual
basis in a compensation program is appropriate because, like our primary peers
and other public companies, we measure and report our business accomplishments
annually. Further, the STIP
drives achievement of key business
results on an annual basis. Payments under the STIP are performance-based and
not guaranteed, as further discussed below.
The 2015 STIP included, and the 2016
STIP also includes, a threshold performance target based on a minimum
fully-diluted earnings per share metric (the “EPS Threshold Metric”). All
amounts payable under the STIP are subject to the EPS Threshold Metric being
satisfied. Assuming satisfaction of this threshold target, then specific
payments under the STIP are calculated using the following formula for all named
executive officers, subject to committee approval and discretion to set the
award:
The 2015 STIP included an EPS Threshold
Metric of $1.98. All amounts payable under the STIP were subject to satisfaction
of the EPS Threshold Metric. The Company achieved fully-diluted earnings per
share of $2.74 in 2015, satisfying the EPS Threshold Metric.
Under the 2015 STIP, 70% of the annual
incentive was tied to achievement of Company specific financial performance
metrics while the remaining 30% was tied to achievement of key individual
performance objectives. The performance goals set forth in the 2015 STIP
included specific annual corporate financial objectives consistent with the
Company’s annual operating plan, as well as achievement of Company strategic and
operational objectives.
Target bonus opportunities under our
STIP are equal to a pre-established percentage of the executive’s base salary.
For each financial metric, the committee sets a threshold, target and maximum
level of performance. No bonus is payable below the threshold level of
performance, and performance at or above the maximum level equates to a maximum
payout for that particular financial metric. For 2015, threshold performance
resulted in a payout equal to 50% of the executive’s base salary, target
performance resulted in a payout equal to 100% of the executive’s base salary,
and maximum performance resulted in a payout equal to 200% of the executive’s
base salary.
|
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Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
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29
|
Table of Contents
Financial
Measurements of the 2015 STIP
For 2015, 35% of the annual incentive
was contingent upon achievement of an annual Company EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) target, 17.5% on an annual
Company earnings per share (“EPS”) target and 17.5% on an annual return on
equity (“ROE”) target, all designed to focus management’s efforts on continuing
to improve performance and maximizing stockholder returns.
This proxy statement includes financial
measures that are not presented in accordance with generally accepted accounting
principles (GAAP). These non-GAAP financial measures are included to help
facilitate comparisons of Company operating performance across periods and with
peer companies. Specifically, the Company utilizes EBITDA as a key performance
target. The Company defines EBITDA as earnings before interest, income
taxes,
depreciation, amortization and gain or
loss on disposition of assets. EBITDA is calculated by taking the Company’s net
income, and adding the following: (i) interest expense; (ii) income tax expense;
(iii) depreciation and amortization; and (iv) gain/loss on disposition of
assets. A reconciliation determined in accordance with U.S. GAAP is shown in the
exhibit to the press release issued by the Company on February 25, 2016. A copy
of the press release and reconciliation contained therein is available under the
“Investors” section on our website www.airmethods.com.
Bonuses are determined by comparing the
Company’s fiscal year EBITDA, EPS and ROE to a target level of EBITDA, EPS and
ROE for the year established by our compensation committee. The table set forth
below describes the respective weight of each 2015 financial metric, as well as
the threshold, target and maximum for each such metric. The Company did not
achieve the “target” level for any of the financial
objectives.
|
|
Objective
(1)
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
Results
|
|
|
|
EPS Objective (weighted
25%)
|
|
$2.46
|
|
|
$2.95
|
|
|
$3.25
|
|
|
$2.74
|
|
|
|
EBITDA Objective (weighted 30%)
|
$
|
262,054,000
|
|
$
|
314,465,000
|
|
$
|
345,911,000
|
|
$
|
287,400,000
|
|
|
|
EBITDA Margin Objective
(weighted 15%)
|
|
20%
|
|
|
24.1%
|
|
|
26.5%
|
|
|
21%
|
|
|
(1)
|
See page 30 for further information on
Non-GAAP financial measures.
|
Strategic and
Operational Goals of the 2015 STIP
The Chief Executive Officer
recommended, and the committee, together with the full Board of Directors,
approved the specific operational and strategic goals to be accomplished in 2015
(30% weight) for each named executive officer. In 2015, the operational and
strategic goals were focused on, among other things, cost reductions, days’
sales outstanding, maintenance, outsourcing initiatives, various operational
metrics, successful outcomes on key litigation matters, target acquisitions and
efficiencies in certain company-wide training programs.
The percentage of achievement for each
of the named executive officers with respect to their individual operational and
strategic goals is as follows:
|
●
|
Aaron D. Todd –
85%
|
|
●
|
Michael D. Allen –
80%
|
|
●
|
Trent J. Carman –
75%
|
|
●
|
David M. Doerr –
88%
|
|
●
|
Crystal L. Gordon – 85%
(achievement of individual performance objectives was 77%, but upon the
recommendation of the CEO and concurrence of the committee, Ms. Gordon’s
individual performance achievement was increased by 8% to
85%).
|
2015 STIP
Awards
On average, the committee approved
awards at 54% of target award. The amounts awarded under the 2015 STIP to the
named executive officers are as follows:
|
|
Name
|
|
Amount Earned
(Financial
Metrics)
|
|
Amount Earned
(Individual
Goals)
|
|
Total
Amount
Earned
|
|
Percent of
“Target” Award
|
|
|
|
Aaron D. Todd,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
$
|
225,691
|
|
$
|
195,075
|
|
$
|
420,766
|
|
55%
|
|
|
|
Michael D. Allen,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Domestic Air Medical Services
|
|
$
|
135,414
|
|
$
|
110,160
|
|
$
|
245,574
|
|
54%
|
|
|
|
Trent J. Carman,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer & Treasurer
|
|
$
|
120,368
|
|
|
$91,800
|
|
$
|
212,168
|
|
52%
|
|
|
|
David M. Doerr,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EVP, Business Development
|
|
$
|
120,368
|
|
$
|
107,712
|
|
$
|
228,080
|
|
56%
|
|
|
|
Crystal L.
Gordon,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel, Secretary, and Senior Vice
President
|
|
|
$97,799
|
|
|
$84,533
|
|
$
|
182,332
|
|
55%
|
|
30
Table of Contents
|
|
Compensation Discussion and Analysis
|
|
|
Long-Term Incentive
Compensation
Long-term incentive compensation awards
are designed to align the interests of our named executive officers with those
of our stockholders. This portion of compensation consists of performance-based
awards that provide incentives for achieving results consistent with the goal of
sustained growth in stockholder value. The committee believes that long-term
compensation should represent the largest portion of an executive’s total
compensation package and that the levels of payouts should reflect the Company’s
performance levels. In 2015, long-term incentive compensation awards represented
the largest portion of each named executive officers’ compensation.
Further, in an effort to shift a
greater percentage of each named executive officer’s total compensation to
long-term incentive compensation, in 2016 the committee reduced the target
amount available under the short-term incentive plan to 75% (as compared to
100%) and increased the target amount available under the long-term incentive
compensation to 125% (as compared to 100%). Note that no changes were made to
Mr. Todd’s short-term or long-term incentive targets.
In establishing the target value of
long-term incentive awards for each named executive officer, the committee
relies on compensation data provided by its independent compensation consultant,
Pay Governance. The committee also considers the named executive officer’s prior
year individual and team performance, as well as the expected contribution in
future years.
The Company’s long term incentive
program is comprised solely of equity awards to be granted on an annual basis.
They are designed to focus management on our strategy of driving consistent,
sustainable achievement of long-term goals, both incrementally and over long
performance periods. The annual granting of multi-year performance compensation
(including three-year performance targets) is designed to ensure that the
execution of the Company’s strategic plan considers appropriate risks and
returns and allows for initiatives that span several fiscal years.
In 2015, the committee provided
long-term incentives to our named executive officers using two primary types of
equity awards.
Stock
Options
The Company uses stock options to align
the interests of its executive officers with stockholders because value is
realized only if the stock price appreciates (stock price
performance).
Performance
Share Units
The Company uses performance share
units to help retain its executives and further align their interests with our
stockholders. The performance share units are subject to a designated three-year
performance period. The vesting percentage is determined by the Company’s total
shareholder return percentile (the “TSR Percentile”). The TSR Percentile means
the percentile rank of the Company’s TSR during the performance period relative
to the TSR of other companies in the designated peer group during the
performance period as determined by the Company; provided that for purposes of
measuring the TSR Percentile, the beginning and ending TSR values shall be
calculated based on the average of the closing prices of the applicable
company’s stock for the 90 trading days prior to and including the beginning or
ending date, as applicable, of the performance period.
The Company believes that options and
performance share units have retentive attributes and effectively align our
executive officers’ interests with the interests of our stockholders on a
long-term basis. Performance share units also have an additional
performance-based component that compares our performance with that of our peer
companies. We believe this combination of long-term equity awards appropriately
provides incentives that capture absolute total return performance of our common
stock as well as awards that also capture variable performance relative to the
performance of other companies of our peer group.
As described in greater detail below,
the committee did make certain adjustments to the long-term incentive
compensation for the 2016 grants, which included the addition of restricted
stock units and a modification to the benchmark utilized for the performance
share units.
|
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Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
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31
|
Table of Contents
2015 Long-Term
Incentive Compensation
In 2015, each of our named executive
officers received 50% of his or her long-term incentive award in the form
of
options and 50% of his or her long-term
incentive award in the form of performance share units. The amount and type of
equity granted to our named executive officers in 2015 was as
follows:
|
|
Name
|
|
Targeted Long-Term
Equity Grant Value
(200% of Base
Salary for CEO
and 100% for Other NEOs)
($)
|
|
Stock Options
(#)
|
|
Performance
Share
Units
(1)
(#)
|
|
|
|
Aaron D. Todd,
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
$1,530,000
|
|
46,047
|
|
13,031
|
|
|
|
Michael D. Allen,
|
|
|
|
|
|
|
|
|
|
President, Domestic Air Medical Services
|
|
$459,000
|
|
18,419
|
|
5,212
|
|
|
|
Trent J. Carman,
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer & Treasurer
|
|
$408,000
|
|
16,372
|
|
4,633
|
|
|
|
David M. Doerr,
|
|
|
|
|
|
|
|
|
|
EVP, Business Development
|
|
$408,000
|
|
16,372
|
|
4,633
|
|
|
|
Crystal L.
Gordon,
|
|
|
|
|
|
|
|
|
|
General Counsel, Secretary, and Senior Vice
President
|
|
$331,500
|
|
13,303
|
|
3,764
|
|
|
(1)
|
The performance share units
granted in 2015 are subject to a designated three-year performance period
from January 1, 2015 through and including December 31, 2017. This amount
reflects the target number of performance share units, assuming
satisfaction of a TSR Percentile of 25%.
|
Stock
Options
The 2015 options vest one-third on
January 1, 2016, one-third on January 1, 2017 and one-third on January 1, 2018,
provided the award recipient remains continuously employed through the
applicable vesting date. The exercise price for the options is equal to $44.03,
which was the closing stock price of the Company’s common stock on the date of
the grant. Each of the options expires five years after the date of its
grant.
Performance
Share Units
The 2015 performance share units are
subject to a designated three-year performance period beginning on January 1,
2015 through and including December 31, 2017. Satisfaction of the performance
conditions for the performance share units granted during 2015 is determined at
the end of the three-year measurement period. Any performance share units that
have not vested at the end of the measurement period are forfeited. The
performance criterion for the performance share units are based on a comparison
of the Company’s TSR for the three-year measurement period with the TSRs of a
group of peer companies for the same three-year measurement period; provided
that for purposes of measuring the TSR Percentile, the beginning and ending TSR
values shall be calculated based on the average of the closing prices of the
applicable company’s stock for the 90 trading days prior to and including the
beginning or ending date, as applicable, of the performance period. The number
of earned shares of the Company’s common stock will be
calculated based on the Company’s TSR
Percentile ranking as of the end of the annual measuring period relative to the
other companies in the peer group as follows:
|
|
TSR Ranking vs. Peer Group
|
|
% of “Target” PSUs Earned
|
|
|
|
75% percentile or above
|
|
133%
|
|
|
|
50
th
percentile
|
|
100%
|
|
|
|
25
th
percentile
|
|
67%
|
|
|
|
Less than 25% percentile
|
|
0%
|
|
If the Company is ranked between the
25
th
and 75
th
percentiles, the percentage multiple will be
interpolated on a linear basis based on the actual percentile ranking of the
Company. All 2015 performance share units earned after the measurement period
will be settled in shares of the Company’s common stock following the end of the
three-year performance cycle.
Governance
Features of the Executive Compensation Program
Below we summarize certain executive
compensation practices, both the practices we have implemented to drive
performance and the practices we have not implemented because we do not believe
they would serve our stockholders’ long-term interests.
Benefits, Prerequisites
and Severance
We maintain no supplemental pension
plans or other programs in which gains from prior compensation could influence
amounts earned currently. The committee may consider gains from prior awards
when determining the appropriate size of long-term incentive
grants.
32
Table of Contents
|
|
Compensation Discussion and Analysis
|
|
|
Stock Ownership
Guidelines
The Company has implemented stock
ownership guidelines for its directors and named executive officers. The
ownership requirement for our non-employee directors is three (3) times the
annual retainer amount as of January 1, 2013. Named executive officers must own
a number of Qualifying Shares equal to a multiple of their base salary, ranging
from 5 (CEO) to 1 (Regional Vice Presidents). “Qualifying Shares” includes the
Company’s common stock (including vested and unvested restricted common
stock).
Each named executive officer is
required to achieve the target stock ownership within three (3) years after
being designated as a Section 16 Officer, or in the case of a named executive
officer designated as a Section 16 Officer at the time the Original Guidelines
were adopted, by December 31, 2015, which was five (5) years from the date of
adoption of such guidelines. Non-employee directors are required to achieve the
target stock ownership within three (3) years of joining the Board of Directors,
or in the case of non-employee directors serving at the time the guidelines were
adopted, by December 31, 2013, which was three (3) years from the date of
adoption of the Original Ownership Guidelines.
As of December 31, 2015, all named
executive officers and non-employee directors subject to the Company’s stock
ownership guidelines have met or are on track to meet their ownership
requirements.
Prohibition On
Derivative Transactions
Our Insider Trading Policy prohibits,
among many other actions, our named executive officers and directors from
entering into derivative transactions such as puts, calls or hedges with our
stock. Directors and officers are also encouraged to exercise caution in
pledging the Company’s securities or using the Company’s securities to support
margin debt. In an effort to discourage pledging of the Company’s stock, the
committee does not permit employees and non-employee directors subject to the
stock ownership guidelines to count such pledged shares towards meeting the
ownership requirements set forth in the stock ownership guidelines.
Responsible Equity
Grant Practices
The Company’s equity grant practices
ensure all grants are made on fixed grant dates and at exercise prices or grant
prices equal to the “Fair Market Value” of the Company’s common stock on such
dates. In addition, all equity grants are awarded independent of the timing of
our release of material, non-public information.
Clawback
Policy
At this time, the committee has not
adopted a clawback policy for the executive management team. While in full
support of such a policy, the committee is waiting for the anticipated adoption
of final rules by the Securities and Exchange Commission before adoption and
implementation of a specific policy. The employment agreements entered into
between the Company and each of the named executive officers, however, do
contain a provision that makes each named executive officer’s compensation
subject to any clawback or recoupment policies of the Company that are generally
applicable to the Company’s senior management, as may be in effect from time to
time, or as required by applicable law.
In addition, as required under Section
304 of the Sarbanes-Oxley Act of 2002, the annual bonus and other incentive
compensation must be forfeited by the Company’s chief executive officer and the
chief financial officer if, during the 12-month period following the issuance of
financial statements, those financial statements must be restated due to
material noncompliance as a result of misconduct in the preparation of those
financial statements.
Risk
Mitigation
We believe our compensation programs
are balanced and focused on the long term performance of our organization, yet
contain risk mitigating features to ensure we manage risks accordingly. Under
this structure, the highest amount of compensation that can be achieved is
through consistent superior performance over sustained periods of time. This
structure provides strong incentives to manage the Company for the long term,
while avoiding excessive risk-taking in the short term. Goals and objectives
reflect a balanced mix of quantitative and qualitative performance measures to
avoid excessive weight on a single performance measure and we have caps on all
incentive plans. Likewise, the elements of compensation are balanced among
current cash payments, deferred cash and equity awards. In addition, a
significant percentage of our management’s incentive compensation is based on
the total performance of the Company. This structure is designed to mitigate any
incentive to pursue strategies that might maximize the performance of a single
operating division or financial metric to the detriment of our Company as a
whole. Finally, with limited exceptions, the committee retains a large amount of
discretion to adjust compensation downward for quality of performance and
adherence to Company values.
|
Continues on next page
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|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual Meeting & Proxy Statement
|
33
|
Table of Contents
2016 Financial
Metrics
The 2016 financial performance metrics
focus executives on maximizing operating income and are good indicators of how
effectively the Company’s annual business objectives and strategies are being
executed. The financial metrics for 2016 are the same as those
previously established under the 2015
short-term incentive plan except the committee modified one financial metric.
Rather than utilizing return on equity as a financial metric, the committee
elected to use return on capital. Such change was made to not only account for
the value of ownership interests in the Company, but also to include the total
value of the debt outstanding.
The following table sets forth the
respective weight of each 2016 financial performance metric, as well as the
rationale for each of the metrics:
|
|
2016 Metric
|
|
Rationale for Metric
|
|
% of Bonus
Potential
|
|
|
|
Earnings Per Share
|
|
Measures profitability and delivery of stockholder value at
the corporate level
|
|
17.5%
|
|
|
|
EBITDA
|
|
Motivates growth, gross margin performance and expense
management; direct correlation of earnings performance with share
valuation
|
|
35%
|
|
|
|
Return on Capital
|
|
Measures how effectively a company has
utilized the money invested in its operations and is calculated as net
operating profit after tax divided by total average capital
|
|
17.5%
|
|
|
|
TOTAL:
|
|
|
|
70%
|
|
2016 Strategic
and Operational Goals
Similar to the 2015 STIP, the Chief
Executive Officer recommended, and the committee, together with the full Board
of Directors, approved the specific operational and strategic goals to be
accomplished in 2016 (30% weight) for each named executive officer. In 2016, the
operational and strategic goals are focused on, among other things, achievement
of certain legislative initiatives, reduction in days’ sales outstanding,
capital expenditure targets, integration initiatives related to the acquisition
of Tri-State CareFlight and completion of strategic growth drivers outlined for
2016.
2016 Long-Term
Incentive Compensation
In March 2016, the committee made
equity grants to the Company’s named executive officers, 50% of the awards
consisting of performance share units, 25% of the awards consisting of options,
and 25% consisting of restricted stock units. In 2016, the committee added
performance-based restricted stock units to the long-term incentive compensation
program. The performance-based restricted stock units are consistent with the
committee’s pay for performance philosophy, as the units include a performance
metric threshold requirement. The committee
elected to shift a percentage (25%) of
the equity awards to performance-based restricted stock units from options to
reduce dilution and include another retention component in the long-term
incentive program.
As noted above, the targeted equity
grant amounts were modified for the named executive officers (other than the
CEO). In 2016, the targeted equity grant amount for the named executive officers
(other than the CEO) is 125% of base salary compared to 100% of base salary in
2015. The committee made this change to allocate a greater percentage of total
compensation for the named executive officers to long-term incentive
compensation and reduce the emphasis on annual incentives. In connection with
this change, the committee reduced the targeted short-term performance bonus
from 100% to 75% of base salary for the named executive officers other than the
CEO. The targeted equity grant amount for the CEO remained at 150% of base
salary.
In 2016, the committee also modified
its performance share units such that total shareholder return (“TSR”) is now
based upon the Russell 2000 Index instead of the Company’s Compensation Peer
Group. The committee determined that use of the Russell 2000 Index would provide
a better performance benchmark given the Company’s unique
industry.
34
Table of Contents
|
|
Compensation Discussion and
Analysis
|
|
|
|
Name
|
|
Targeted Long-Term
Equity Grant Value
(150% of
Base Salary
for CEO and 125%
for
Other NEOs)
($)
|
|
Stock Options
(#)
|
|
Performance
Share
Units
(1)
(#)
|
|
Restricted
Stock
Units
(#)
|
Aaron D. Todd,
Chief Executive Officer
|
|
|
$
|
1,147,500
|
|
27,691
|
|
15,863
|
|
7,931
|
Michael D.
Allen,
President, Domestic Air Medical Services
|
|
|
$
|
573,750
|
|
13,845
|
|
7,931
|
|
3,966
|
Trent J. Carman,
Chief Financial Officer &
Treasurer
|
|
|
$
|
510,000
|
|
12,307
|
|
7,050
|
|
3,525
|
David M.
Doerr,
EVP, Business Development
1
|
|
|
$
|
510,000
|
|
12,307
|
|
7,050
|
|
3,525
|
Crystal L. Gordon,
General Counsel, Secretary, and Senior Vice
President
|
|
|
$
|
414,375
|
|
9,999
|
|
5,728
|
|
2,864
|
|
(1)
|
The performance share units granted in 2016 are subject
to a designated three-year performance period from January 1, 2016 through
and including December 31, 2018. This amount reflects the target number of
performance share units, assuming satisfaction of a TSR Percentile of
25%.
|
The options will vest, subject to
continued employment, over a three-year period commencing March 30, 2017, with
one-third vesting on each anniversary of March 30, 2016.
The performance share units granted in
2016 are subject to a designated three-year performance period from January 1,
2016 through and including December 31, 2018. Between 0% and 200% of the target
number of performance share units may vest on December 31, 2018, with the
vesting percentage to be determined based on the TSR Percentile.
Subject to achievement of the 2016
fully diluted earnings per share performance metric, the restricted stock units
will vest over a three-year period commencing March 30, 2017, with one-third
vesting on each anniversary of March 30, 2016. The named executive officer must
also be employed on the vesting date.
Tax and Accounting
Considerations
Section 162(m) of the Internal Revenue
Code (the “Code”) limits the deductibility for tax purposes of compensation over
$1 million in any taxable year paid by a company to certain named executive
officers. The policy of the compensation committee is to establish and maintain
a compensation program that maximizes the creation of long-term stockholder
value. The compensation committee
attempts to generally structure most
compensation approaches to preserve deductibility. The compensation committee,
however, reserves the right to adopt programs giving consideration to factors
other than deductibility where the compensation committee believes stockholder
interests are best served by retaining flexibility. In such cases, the
compensation committee may consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with its compensation
objectives.
As discussed above, performance bonuses
are generally paid under the Performance Pay Plan and thus are intended to
qualify as “performance-based compensation” under Section 162(m) of the Code.
Accordingly, such amounts are intended to be deductible by the Company even if
they are in excess of the $1 million statutory limit. Prior to 2016, certain of
our annual equity awards to our executives were not performance-based.
Consequently, a portion of that compensation may not be deductible in future
years if such executive’s aggregate compensation is in excess of statutory
limits.
In addition to the foregoing, we
monitor the treatment of options under FASB ASC Topic 718 in determining the
form and size of option grants.
|
Continues on next page
►
|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
35
|
Table of Contents
|
|
Compensation Committee
Report
|
The compensation committee of the Board
of Directors (the “committee”) has reviewed and discussed the section of this
proxy statement entitled “Compensation Discussion and Analysis” with management.
Based on such review and discussions, the committee recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this
proxy statement and the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2015.
By the Compensation
Committee
Mark D. Carleton, Chairman
Ralph
J. Bernstein
Jeffrey A. Dorsey
36
Table of Contents
|
|
Compensation Committee
Report
|
|
|
Equity Compensation
Tables
Summary Compensation
Table
The following table sets forth the
total compensation earned by the named executive officers for the fiscal years
ended December 31, 2015, 2014, and 2013:
Name and Principal Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Bonus
($)
(d)
|
|
Stock
Awards
($)
(e)
|
|
Option
Awards
($)
(f)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(g)
|
|
All Other
Compensation
($)
(h)
|
|
Total
($)
(i)
|
Aaron D. Todd,
Chief Executive Officer
|
|
2015
|
|
765,000
|
|
420,766
|
|
813,032
|
|
573,746
|
|
877,341
|
|
53,744
|
|
3,503,629
|
|
|
2014
|
|
765,000
|
|
578,095
|
|
1,720,962
|
|
765,012
|
|
877,341
|
|
51,984
|
|
4,758,394
|
|
|
2013
|
|
749,577
|
|
—
|
|
388,400
|
|
—
|
|
—
|
|
42,716
|
|
1,180,693
|
Michael D. Allen,
President, Domestic Air Services
|
|
2015
|
|
459,000
|
|
245,574
|
|
325,213
|
|
229,501
|
|
473,010
|
|
36,697
|
|
1,768,995
|
|
|
2014
|
|
459,000
|
|
346,857
|
|
645,410
|
|
286,887
|
|
473,010
|
|
35,410
|
|
2,246,574
|
|
|
2013
|
|
446,008
|
|
—
|
|
291,300
|
|
—
|
|
—
|
|
32,282
|
|
769,590
|
Trent J. Carman,
Chief Financial Officer and
Treasurer
|
|
2015
|
|
408,000
|
|
212,168
|
|
289,078
|
|
203,995
|
|
439,624
|
|
43,788
|
|
1,596,653
|
|
|
2014
|
|
408,000
|
|
288,748
|
|
573,698
|
|
255,014
|
|
439,624
|
|
42,366
|
|
2,007,450
|
|
|
2013
|
|
400,000
|
|
—
|
|
194,200
|
|
—
|
|
—
|
|
32,482
|
|
626,682
|
David M. Doerr,
EVP, Business Development
|
|
2015
|
|
408,000
|
|
228,080
|
|
289,078
|
|
203,995
|
|
—
|
|
35,112
|
|
1,164,265
|
|
|
2014
|
|
408,000
|
|
308,317
|
|
573,698
|
|
255,014
|
|
—
|
|
32,762
|
|
1,577,791
|
|
|
2013
|
|
61,538
|
|
—
|
|
664,650
|
|
130,679
|
|
—
|
|
—
|
|
856,867
|
Crystal L. Gordon,
General Counsel, Secretary and SVP
|
|
2015
|
|
331,500
|
|
182,232
|
|
234,876
|
|
165,755
|
|
133,545
|
|
13,409
|
|
1,061,317
|
|
|
2014
|
|
331,500
|
|
250,508
|
|
466,097
|
|
207,189
|
|
133,545
|
|
18,989
|
|
1,407,828
|
|
|
2013
|
|
325,000
|
|
—
|
|
194,200
|
|
—
|
|
—
|
|
16,238
|
|
535,438
|
Salary (Column
(c))
The amount in the Salary column
represents the base salary earned by each named executive officer in the
applicable year.
Bonus (Column
(d))
The amount in the Bonus column
represents the amount earned under the Executive Short Term Incentive Program
(the “STIP”), established under the Performance Pay Plan. No bonuses were earned
in 2013. Bonuses earned in 2015 and paid in 2016 are included in 2015
compensation above.
Stock Awards (Column
(e))
This column shows (i) the aggregate
grant date fair value of PSUs granted in 2015 and 2014 to the named executive
officers, and (ii) the value of the shares of restricted stock granted in 2013,
which is valued at the closing price of the common stock on the date of grant.
Generally, the aggregate grant date fair value for the PSUs is the amount the
Company expects to expense for accounting purposes over the award’s vesting
schedule and does not correspond to the actual value that the named executive
officers will realize from the award. The cost the Company records for PSUs
granted in 2015 and 2014 is determined using a Monte Carlo simulation model. The
number of PSUs that will vest depends on the level of achievement of a market
performance condition, over a three-year period based on the TSR of the Company
relative to the TSR of a pre-defined competitor group. If a PSU’s minimum
performance measure is not
met, no award is earned and the Company
will not adjust the amounts related to the PSUs that are reported as
compensation in 2015 or 2014, as applicable.
Option Awards (Column
(f))
This column shows the aggregate grant
date fair value of stock options granted in the years shown. These amounts
reflect the Company’s accounting expense (calculated in accordance with FASB ASC
Topic 718) and do not correspond to the actual value that that named executives
will realize. The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model. The Company uses historical
option exercise data for similar employee groups, as well as the vesting period
and contractual term, to estimate the expected term of options granted; the
expected term represents the period of time that options granted are expected to
be outstanding. Expected volatility is based on historical volatility of the
Company’s stock. The risk-free rate for periods within the contractual life of
the option is based on the U.S. Treasury yield curve in effect at the time of
the grant. Assumptions used in the calculation of expense for the option awards
for Mr. Doerr in 2013 and the named executive officers in 2015 and 2014 are
included in Note 10 to the consolidated financial statements in our 2014 Annual
Report on Form 10-K filed with the SEC on February 27, 2015 and our 2015 Annual
Report on Form 10-K filed with the SEC on February 26, 2016, as applicable. See
the 2015 Grants of Plan-Based Awards Table on page 38 for additional information
on stock options granted in 2015.
|
Continues on next page
►
|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
37
|
Table of Contents
Non-Equity Incentive
Plan Compensation (Column (g))
This column reflects the amount paid to
each named executive officer under the EVA Plans in 2015 and 2014. Amounts
earned under the EVA Plans are paid in three equal installments with the first
two installments paid on September 15, 2014 and January 1, 2015. The final
installment was paid on January 1, 2016. Mr. Doerr did not participate in any of
the EVA Plans and Ms. Gordon did not participate in the 2011 EVA
Plan.
All Other Compensation
(Column (h))
This column reflects for each named
executive officer, the sum of (i) the amounts contributed by the Company to the
applicable Company 401(k) and savings plan; and (ii) the
dollar value of life insurance and
disability premiums paid by the Company. Amounts contributed to the Company
401(k) and savings plan are calculated on the same basis for all participants,
including the named executive officers. Other than as set forth in columns (a)
through (h), the named executive officers do not receive any other forms of
compensation from the Company. There has been no above-market or preferential
earnings on compensation that is deferred on a basis that is not tax-qualified,
including such earnings on nonqualified defined contribution
plans.
2015 Grants of Plan-Based
Awards
During fiscal 2015, the named executive
officers received (i) time-based incentive stock option awards under the 2006
Plan and (ii) performance share units, under the Performance Pay Plan. The
following table provides additional information about the equity awards granted
to our named executive officers during fiscal 2015:
|
|
|
|
|
|
STIP
2015 Non-Equity
Incentive Plan
Awards
|
|
Estimated Future Payouts Under
Equity
Incentive Plan
Awards
|
|
|
|
|
|
|
Name (a) and
Grant Date
(b)
|
|
|
|
Threshold
($)
(c)
|
Target
($)
(d)
|
Maximum
($)
(e)
|
|
Threshold
(25
th
TSR
Percentile)
(#)
(f)
|
Target
(50
th
TSR
Percentile)
(#)
(g)
|
Maximum
(75
th
TSR
Percentile
and
Above)
(#)
(h)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(i)
|
Exercise
Price
of
Option
Award
($/Share)
(j)
|
Grant Date
Fair
Value
of Stock
and Option
Awards
($)
(k)
|
|
|
|
Aaron D.
Todd,
Chief Executive
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STIP
|
|
2/5/2015
|
|
382,500
|
765,000
|
1,300,500
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
2/5/2015
|
|
|
|
|
|
13,031
|
19,547
|
26,062
|
—
|
—
|
813,032
|
|
|
|
Options
|
|
2/5/2015
|
|
|
|
|
|
—
|
—
|
—
|
46,047
|
44.03
|
573,746
|
|
|
|
Michael D.
Allen,
President Domestic
Air
Medical
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STIP
|
|
2/5/2015
|
|
229,500
|
459,000
|
780,300
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
2/5/2015
|
|
|
|
|
|
5,212
|
7,818
|
10,425
|
—
|
—
|
325,213
|
|
|
|
Options
|
|
2/5/2015
|
|
|
|
|
|
—
|
—
|
—
|
18,419
|
44.03
|
229,501
|
|
|
|
Trent J.
Carman,
Chief
Financial
Officer &
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STIP
|
|
2/5/2015
|
|
204,000
|
408,000
|
693,600
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
2/5/2015
|
|
|
|
|
|
4,633
|
6,950
|
9,266
|
—
|
—
|
289,078
|
|
|
|
Options
|
|
2/5/2015
|
|
|
|
|
|
—
|
—
|
—
|
16,372
|
44.03
|
203,995
|
|
|
|
David M.
Doerr,
EVP,
Business
Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STIP
|
|
2/5/2015
|
|
204,000
|
408,000
|
693,600
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
2/5/2015
|
|
|
|
|
|
4,633
|
6,950
|
9,266
|
—
|
—
|
289,078
|
|
|
|
Options
|
|
2/5/2015
|
|
|
|
|
|
—
|
—
|
—
|
16,372
|
44.03
|
203,995
|
|
|
|
Crystal L.
Gordon,
General
Counsel,
Secretary, and
Senior
Vice
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STIP
|
|
2/5/2015
|
|
165,750
|
331,500
|
563,550
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
2/5/2015
|
|
|
|
|
|
3,764
|
5,646
|
7,529
|
—
|
—
|
234,876
|
|
|
|
Options
|
|
2/5/2015
|
|
|
|
|
|
—
|
—
|
—
|
13,303
|
44.03
|
165,756
|
|
38
Table of Contents
|
|
Compensation Committee
Report
|
|
|
STIP 2015 Non-Equity
Incentive Plan Awards (Columns (c),(d) and (e))
The awards represent cash payouts which
are based on both financial metrics and individual goals. For additional details
of the non-equity incentive plan awards paid in 2015, see the discussion
beginning on page 29.
Estimated Payouts
Under Equity Incentive Plan Awards (Columns (f),(g) and (h))
The awards represent PSUs granted on
February 5, 2015 under the Performance Pay Plan. The performance period for the
awards is from January 1, 2015 to December 31, 2017. For additional details of
the PSU awards granted in 2015, see the discussion beginning on page
32.
All Other Option
Awards (Stock Options) (Columns (i) and (j))
The awards represent stock options
granted in February 2015 under the 2006 Plan. These options have a term of five
years from the date of grant and vest one-third on January 1, 2016, one-third on
January 1, 2017 and one-third on January 1, 2018 (three-year period). The
exercise price of the stock options is $44.03, the closing price of the
Company’s stock on the date of grant.
Grant Date Fair Value
of Option Awards (Column (k))
The grant date fair value of each
equity award is computed in accordance with FASB ASC Topic
718.
2015 Option Exercises and
Stock Vested
The following table contains
information with respect to the named executive officers concerning option
exercises and vesting of restricted stock during fiscal year 2015:
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Name
|
|
Number of
Shares
Acquired on
Exercise (#)
(a)
|
|
Value Realized
on
Exercise ($)
(b)
|
|
Number of Shares
Acquired on
Vesting
(#)
(c)
|
|
Value Realized on
Vesting ($)
(d)
|
|
Aaron D. Todd,
Chief Executive Officer
|
|
—
|
|
—
|
|
3,000
|
|
129,990
|
|
Michael D.
Allen,
President, Domestic Air Medical Services
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Trent J. Carman,
Chief Financial Officer and Treasurer
|
|
22,500
|
|
740,250
|
|
2,000
|
|
86,660
|
|
David Doerr
EVP,
Business Development
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Crystal L. Gordon,
General Counsel, Corporate Secretary and
Senior Vice President
|
|
—
|
|
—
|
|
4,500
|
|
190,725
|
|
|
(a)
|
Represents aggregate number of shares acquired upon
exercise in fiscal year 2015.
|
|
(b)
|
Represents aggregate net gain on shares acquired by
options exercised in fiscal year 2015. Value is based upon the closing
price of our common stock on the date of share acquisition less the
exercise price of the options.
|
|
(c)
|
Represents the aggregate number of shares acquired upon
vesting of restricted stock in 2015.
|
|
(d)
|
Represents the aggregate value of shares acquired by the
vesting of restricted stock in 2015 and is the product of the number of
vested shares and the market value of the underlying shares on the vesting
date. The vesting date for all of the named executive officers is January
1, 2015 with the exception of Ms. Gordon, who vested additional shares on
July 1, 2015.
|
|
Continues on next page
►
|
|
|
|
|
|
Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
|
39
|
Table of Contents
Outstanding Equity Awards at
December 31, 2015
The following table provides certain
summary information concerning unexercised options and shares of restricted
stock that have not vested as of December 31, 2015:
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(Exercisable)
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or Units
of
Stock That Have
Not Vested
(#)
|
|
Market Value of
Shares or
Units of
Stock That Have Not
Vested
($)
|
|
|
|
Aaron D. Todd,
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
50,596
|
1
|
|
53.02
|
|
08/06/2019
|
|
|
|
|
|
|
|
|
|
|
|
46,047
|
2
|
|
44.03
|
|
02/05/2020
|
|
8,000
|
3
|
|
335,440
|
|
|
|
Michael D.
Allen,
President, Domestic Air Medical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
18,974
|
4
|
|
53.02
|
|
08/06/2019
|
|
|
|
|
|
|
|
|
|
|
|
18,419
|
5
|
|
44.03
|
|
02/05/2020
|
|
6,000
|
6
|
|
251,580
|
|
|
|
Trent J. Carman,
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
16,866
|
7
|
|
53.02
|
|
08/06/2019
|
|
|
|
|
|
|
|
|
|
|
|
16,372
|
8
|
|
44.03
|
|
02/05/2020
|
|
4,000
|
9
|
|
167,720
|
|
|
|
David
Doerr,
EVP, Business Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
10
|
|
—
|
|
|
44.31
|
|
10/21/2018
|
|
|
|
|
|
|
|
|
—
|
|
|
16,866
|
11
|
|
53.02
|
|
08/06/2019
|
|
15,000
|
13
|
|
628,950
|
|
|
|
|
|
|
16,372
|
12
|
|
44.03
|
|
02/05/2020
|
|
—
|
|
|
—
|
|
|
|
Crystal L. Gordon,
General Counsel, Corporate Secretary
and
Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
13,703
|
14
|
|
53.02
|
|
08/06/2019
|
|
10,000
|
16
|
|
545,090
|
|
|
|
|
|
|
13,303
|
15
|
|
44.03
|
|
02/05/2020
|
|
|
|
|
|
|
|
(1)
|
These options vest 100% on July 1, 2017.
|
|
(2)
|
These options vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(3)
|
These shares vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(4)
|
These options vest 100% on July 1, 2017.
|
|
(5)
|
These options vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(6)
|
These shares vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(7)
|
These options vest 100% on July 1, 2017.
|
|
(8)
|
These options vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(9)
|
These shares vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(10)
|
These options vested 100% on October 21,
2014.
|
|
(11)
|
These options vest 100% on July 1, 2017.
|
|
(12)
|
These options vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(13)
|
These shares vest one-third on each of October 21, 2016,
October 21, 2017 and October 21, 2018.
|
|
(14)
|
These options vest 100% on July 1, 2017.
|
|
(15)
|
These options vest one-third on each of January 1, 2016,
January 1, 2017 and January 1, 2018.
|
|
(16)
|
This stock vests 1,334 shares on January 1, 2016, 3,000
shares on July 1, 2016, 1,333 shares on January 1, 2017, 3,000 share on
July 1, 2017 and 1,333 shares on January 1,
2018.
|
40
Table of Contents
On September 24, 2012, the Company
entered into Amended and Restated Employment Agreements (the “Amended Employment
Agreements”) with each of Michael D. Allen, President of Domestic Air Medical
Services, Trent J. Carman, Chief Financial Officer, and Crystal L. Gordon,
Senior Vice President, General Counsel and Secretary, and Aaron D. Todd, Chief
Executive Officer. The Amended Employment Agreements superseded and replaced the
employment agreements between the named executive officers (other than Mr.
Doerr) and the Company that were entered into on the following dates: January 4,
2006 (Mr. Allen), April 28, 2003 (Mr. Carman), April 4, 2011 (Ms. Gordon), and
July 1, 2003 (Mr. Todd) (collectively, the “Original Employment Agreements”).
The Company entered into an Employment Agreement with Mr. Doerr on October 21,
2013 and for purposes of the description herein, Mr. Doerr’s Employment
Agreement shall be deemed an “Amended Employment Agreement”. On October 1, 2014,
the Company entered into a First Amendment to the Amended Employment Agreement
with Mr. Todd (together with Mr. Todd’s Amended Employment Agreement, “Mr.
Todd’s Employment Agreement”).
The initial term of Mr. Todd’s
Employment Agreement expired on August 31, 2015 and will automatically renew for
subsequent one-year terms thereafter until Mr. Todd’s employment is terminated
in accordance with the agreement. Mr. Todd’s Employment Agreement may be
terminated by either party upon 90 days’ written notice, or immediately by us
for cause.
In the event we terminate
Mr. Todd’s Employment Agreement without cause or
Mr. Todd terminates his employment agreement for good
reason, Mr. Todd is entitled to severance payments for
18 months following termination at an annual rate equal
to one and a half times the sum of his annual base salary
as in effect immediately prior to the date of termination
plus an amount equal to his highest annual average of
annual bonuses earned for the performance in any two
consecutive fiscal years in the last three completed fiscal
years immediately preceding the fiscal year in which
termination occurs. During the term of employment and
for 18 months following the termination of employment,
Mr. Todd may not engage in any business which
competes with us anywhere in the United States.
In the event of termination resulting from a change in
control of the Company, Mr. Todd is entitled to severance
payments for 36 months following termination at an
annual rate equal to three times the sum of his annual
base salary as in effect immediately prior to the date of
termination plus an amount equal to his highest annual
average of annual bonuses earned for the performance
in any two consecutive fiscal years in the last three
completed fiscal years immediately preceding the fiscal
year in which termination occurs.
Each Amended Employment Agreement with
the named executive officers (other than Mr. Todd) is for an initial term of two
years starting on the effective date and is subject to successive one-year
extensions. Each agreement may be terminated either by us or by the executive
upon 90 days’ written notice, or immediately by us for cause. In the event we
terminate an agreement without cause or the executive terminates the agreement
for good reason, the executive is entitled to severance payments for 12 months
following termination at an annual rate equal to the sum of his/her highest
annual base salary as in effect immediately prior to the date of termination
plus an amount equal to his/her highest annual average of annual bonuses earned
for the performance in any two consecutive fiscal years in the last three
completed fiscal years immediately preceding the fiscal year in which
termination occurs. During the term of employment and for 12 months following
the termination of employment, the executive may not engage in any business
which competes with us anywhere in the United States.
In the event of termination resulting
from a change in control of the Company, each named executive officer (other
than Mr. Todd) is entitled to severance payments for 24 months following
termination at an annual rate equal to two times the sum of his/her annual base
salary as in effect immediately prior to the date of termination plus an amount
equal to his/her highest annual average of annual bonuses earned for the
performance in any two consecutive fiscal years in the last three completed
fiscal years immediately preceding the fiscal year in which termination
occurs.
The Original Employment Agreements
provided for a tax equalization payment or gross-up payment to the executive,
which would place the executive in the same after-tax position as if the excise
tax penalty of Section 4999 of the Internal Revenue Code of 1986, as amended,
did not apply. Such provision is typically referred to as a “280G Gross-Up.”
Each of the Amended Employment Agreements has been revised to eliminate the 280G
Gross-Up Provision. Additionally, a provision was added to the Amended
Employment Agreements stating that each executive’s compensation is subject to
the clawback or recoupment policies of the Company that are generally applicable
to the Company’s senior management, as may be in effect from time to time, or as
required by applicable law.
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Air Methods Corporation Notice of the 2016 Annual
Meeting & Proxy Statement
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41
|
Table of Contents
In addition to the severance payments
described above, the executive is entitled to continue to receive, at our
expense, coverage under our health insurance policies, or comparable coverage,
during the term of such severance payments, but only until the executive begins
other employment in connection with which he/she is entitled to health insurance
coverage. As a condition of the executive’s right to receive severance
compensation, the
executive must sign and deliver to the
Company a release of all claims that the executive might otherwise assert
against the Company. During the term of employment and for five years following
the termination of employment, the executive may not directly or indirectly use,
disseminate, or disclose any of our confidential information or trade
secrets.
2015
Potential Payments Upon Termination or Change in Control
The following table summarizes
potential payments that would be made to the named executive officers upon
termination or a change in control of the
Company, assuming the triggering event
took place on December 31, 2015, and the stock price was the closing market
price as of that date.
|
|
|
|
Scenario 1
|
|
Scenario 2
|
|
Scenario 3
|
|
Scenario 4
|
|
Scenario 5
|
|
|
|
Executive
Officer
|
|
Involuntary
Termination
Without
Cause or for Good
Reason (Non-CIC)
|
|
Involuntary
Termination
Without
Cause or for Good
Reason (CIC)
|
|
Death
|
|
Disability
|
|
Change-in-Control
(No
Termination)
|
|
|
|
Aaron D. Todd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
$1,687,500
|
|
$3,375,000
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
H&W
Benefits
|
|
$24,770
|
|
$24,770
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
EVA
Awards
|
|
$877,341
|
|
$877,341
|
|
$877,341
|
|
$877,341
|
|
$877,341
|
|
|
|
Accelerated
Restricted Stock Vesting
|
|
$0
|
|
$335,440
|
|
$335,440
|
|
$335,440
|
|
$335,440
|
|
|
|
Accelerated Stock
Option Vesting
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Performance Share Vesting
|
|
$0
|
|
$1,756,238
|
|
$787,054
|
|
$787,054
|
|
$1,756,238
|
|
|
|
TOTAL
|
|
$2,589,611
|
|
$6,368,789
|
|
$1,999,835
|
|
$1,999,835
|
|
$2,969,019
|
|
|
|
Michael D. Allen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
$636,300
|
|
$1,272,600
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
H&W
Benefits
|
|
$12,001
|
|
$12,001
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
EVA
Awards
|
|
$473,010
|
|
$473,010
|
|
$473,010
|
|
$473,010
|
|
$473,010
|
|
|
|
Accelerated
Restricted Stock Vesting
|
|
$0
|
|
$251,580
|
|
$251,580
|
|
$251,580
|
|
$251,580
|
|
|
|
Accelerated Stock
Option Vesting
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Performance Share Vesting
|
|
$0
|
|
$672,264
|
|
$299,709
|
|
$299,709
|
|
$672,264
|
|
|
|
TOTAL
|
|
$1,121,311
|
|
$2,681,455
|
|
$1,024,299
|
|
$1,024,299
|
|
$1,396,854
|
|
|
|
Trent C. Carman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
$573,000
|
|
$1,146,000
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
H&W
Benefits
|
|
$17,385
|
|
$17,385
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
EVA
Awards
|
|
$439,624
|
|
$439,624
|
|
$439,624
|
|
$439,624
|
|
$439,624
|
|
|
|
Accelerated
Restricted Stock Vesting
|
|
$0
|
|
$167,720
|
|
$167,720
|
|
$167,720
|
|
$167,720
|
|
|
|
Accelerated Stock
Option Vesting
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Performance Share Vesting
|
|
$0
|
|
$597,544
|
|
$266,395
|
|
$266,395
|
|
$597,544
|
|
|
|
TOTAL
|
|
$1,030,009
|
|
$2,368,273
|
|
$873,739
|
|
$873,739
|
|
$1,204,889
|
|
|
|
David Doerr
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
$562,157
|
|
$1,124,317
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
H&W
Benefits
|
|
$17,343
|
|
$17,343
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
EVA
Awards
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Restricted Stock Vesting
|
|
$0
|
|
$628,950
|
|
$628,950
|
|
$628,950
|
|
$628,950
|
|
|
|
Accelerated Stock
Option Vesting
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Performance Share Vesting
|
|
$0
|
|
$597,544
|
|
$266,395
|
|
$266,395
|
|
$597,211
|
|
|
|
TOTAL
|
|
$579,501
|
|
$2,368,154
|
|
$895,345
|
|
$895,345
|
|
$1,226,494
|
|
|
|
Crystal L. Gordon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
$456,754
|
|
$913,508
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
H&W
Benefits
|
|
$17,366
|
|
$17,366
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
EVA
Awards
|
|
$133,545
|
|
$133,545
|
|
$133,545
|
|
$133,545
|
|
$133,545
|
|
|
|
Accelerated
Restricted Stock Vesting
|
|
$0
|
|
$419,300
|
|
$419,300
|
|
$419,300
|
|
$419,300
|
|
|
|
Accelerated Stock
Option Vesting
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
|
|
Accelerated
Performance Share Vesting
|
|
$0
|
|
$485,507
|
|
$216,450
|
|
$216,450
|
|
$485,507
|
|
|
|
TOTAL
|
|
$607,666
|
|
$1,969,227
|
|
$769,295
|
|
$769,295
|
|
$1,038,353
|
|
42
Table of Contents
Change-in-Control Arrangements
In addition to change-in-control
provisions included in the employment agreements described above, our 2006 and
2015 Plans also contain change-in-control provisions. Under the 2006 and 2015
Plans, outstanding options or other equity compensation grants under the plan
become fully vested in connection with
the disposition of all, or substantially all, of the Company’s assets or
outstanding capital stock by means of a sale, a merger or reorganization in
which the Company is not the surviving corporation.
The following equity compensation plan
has been previously approved by our stockholders:
|
●
|
2006 Plan – provides for the granting
of incentive stock options, non-statutory stock options, shares of restricted
stock, stock appreciation rights and supplemental bonuses consisting of shares
of common stock, cash or a combination thereof to employees, directors, and
consultants.
|
|
●
|
2015 Plan – provides for a more
extensive range of equity awards such as restricted stock units, performance
shares and performance stock units to employees, directors, and
consultants.
|
Information regarding the securities
under the 2006 Plan was as follows as of December 31, 2015:
|
|
Plan
Category
|
|
Number
of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
(a)
|
|
|
Weighted-average
exercise
price of
outstanding options,
warrants, and rights
(b)
|
|
Number
of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected
in column (a))
(c)
|
|
|
|
Equity compensation plans approved by
stockholders
|
|
659,292
|
|
|
$43.37
|
|
2,699,776
|
|
|
|
Total
|
|
659,292
|
(1)
|
|
$43.37
|
|
2,699,776
|
|
|
(1)
|
Represents options and performance share
units outstanding under the 2006 and 2015
Plans.
|
Proposals for Inclusion in the 2017
Proxy Statement
. For your proposal or
director nomination to be considered for inclusion in our proxy statement for
next year’s meeting, our corporate secretary must receive your written proposal
at our principal executive office no later than December 21, 2016. All proposals
must comply with the applicable requirements of federal securities’ laws and the
Company’s Bylaws.
Proposal to be Addressed at 2017
Meeting (but not included in proxy statement)
. In order for you to properly bring a proposal (not including director
nomination) before next year’s annual meeting, our corporate secretary must
receive a written notice of the proposal not less than sixty days nor more than
ninety days prior to next year’s annual meeting; provided however, that in the
event that less than seventy days’ notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the tenth day
following the date on which such notice of the date of the annual meeting was
mailed or such public
disclosure was made. In addition, all
notices must contain the additional information required by our Bylaws. To
properly nominate one or more persons for election as a director at next year’s
annual meeting, our corporate secretary must receive a written notice of the
nomination no later than [TBD], and it must contain the additional
information required by our Bylaws.
Bylaw Notice
Requirements
. Our Bylaws provide that
stockholder notice must include the following information with respect to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business the stockholder desires to bring before the annual
meeting, (ii) the name and address, as they appear on the Company’s books, of
the stockholder proposing such business, (iii) the class and number of shares of
the Company that the stockholder beneficially owns, and (iv) the stockholder’s
material interest, if any, in such business. The presiding officer of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
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Air
Methods Corporation Notice of the 2016 Annual Meeting & Proxy
Statement
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51
|
Table of
Contents
“Householding” of Proxy
Materials.
The SEC has adopted rules that
permit companies and intermediaries such as brokers to satisfy delivery
requirements for proxy statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement addressed to
those stockholders if they have provided written or implied consent. This
process, which is commonly referred to as “householding,” potentially provides
extra convenience for stockholders and cost savings for us. Under this
procedure, multiple stockholders who share the same last name and address will
receive only one copy of the annual proxy materials, unless they notify us that
they wish to continue receiving multiple copies. We have undertaken householding
to reduce our printing costs and postage fees.
If you wish to opt-out of householding
and to receive individual copies of the proxy materials for multiple
stockholders at the same address, you may do so at any time prior to thirty days
before the mailing of proxy materials, which will typically be mailed at the
beginning of May each year, by notifying us in writing at: Air Methods
Corporation, Attn: Secretary, 7211 South Peoria Street, Englewood, Colorado
80112, or by contacting us at (303) 792-7400. You also may request additional
copies of the proxy materials by notifying us in writing at the same address or
contacting us at (303) 792-7400, and we will undertake to deliver such
additional copies promptly. If you share an address with another stockholder and
currently are receiving multiple copies of the proxy materials, you may request
householding by notifying us at the above referenced address or telephone
number.
Proxy Solicitation
Costs.
The accompanying proxy is being solicited on behalf of the
Board of Directors of our Company. The Company will bear the expense of
preparing, printing and mailing the form of proxy and the material used in the
solicitation thereof. In addition
to using the mail, the Company’s
directors, officers, and employees, at no additional compensation, may solicit
proxies by personal interview, telephone and telegram. Arrangements also may be
made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of stock held
of record by such persons, and we may reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith.
Forward-Looking
Statements.
This proxy statement may include “forward-looking statements”
(as defined in the Private Securities Litigation Reform Act of 1995). The
forward-looking statements include statements regarding additional matters to be
presented at the 2016 Annual Meeting; plans to decrease the size of our Board of
Directors; committee appointments for Mr. Whitters and Honorable Jessica L.
Wright, Major General (Ret.); potential payments upon termination or change in
control; statements regarding Section 162(m), Section 409A and Section 280G of
the Code and ASC Topic 718; and impact of the compensation program on the
Company. These statements are based on our current expectations and involve
risks and uncertainties that may cause actual results to differ materially from
those set forth in the statements, including changes in governmental regulations
and interpretations thereunder and other risks identified in the Risk Factors
section of the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2015. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Forward-looking statements should be evaluated together with the
many uncertainties that affect our business, particularly those mentioned in the
Risk Factors section in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, and in our quarterly reports on Form 10-Q and current reports
on Form 8-K
52
Table of
Contents
The Company knows of no business that
will be presented for consideration at the Annual Meeting other than that
described above. However, if any other business should come before the Annual
Meeting, it is the intention of the persons named in the enclosed form of Proxy
to vote the proxies respective to any such business in accordance with their
best judgment.
By Order of the Board of
Directors,
Crystal L.
Gordon
General Counsel, Secretary, and
Senior Vice President
Englewood, Colorado
[TBD]
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Air
Methods Corporation Notice of the 2016 Annual Meeting & Proxy
Statement
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53
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Table of
Contents
PROPOSED CHARTER AMENDMENT – REVISE
AND RESTATE ARTICLE V, SECTIONS 2 AND 4
2. Number, Election, and Terms of Directors
Except as otherwise fixed pursuant to
the provisions of Article IV hereof relating to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under specified
circumstances, the number of directors of the Corporation shall be fixed from
time-to-time
by or pursuant to the By-Laws. Subject to the succeeding provisions of
this Section 2, the directors shall be divided into three classes, designated
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. At the 2016 annual meeting of stockholders, the Class I directors
shall be elected for a term expiring at the third succeeding annual meeting of
stockholders (the “2019 Annual Meeting”), and any director appointed to fill the
vacant Class I position shall serve for a term expiring at the 2019 Annual
Meeting. At each annual meeting of stockholders commencing with the 2017 annual
meeting of stockholders, directors elected to succeed those directors whose
terms then expire shall be elected for a term expiring at the next annual
meeting of stockholders. Commencing with the 2019 Annual Meeting, the foregoing
classification of the Board of Directors shall cease, and all directors shall be
elected or appointed for terms expiring at the next annual
meeting of stockholders. All directors
shall hold office until the expiration of the term for which elected, and until
their respective successors are elected, except in the case of the death,
resignation, disqualification or removal of any director.
4. Newly Created Directorships and Vacancies
Except as otherwise fixed pursuant to
the provisions of Article IV hereof relating to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified circumstances,
newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled solely by
the affirmative vote of a majority of the remaining directors then in office,
even though less than a quorum of the Board of Directors. Any director elected
in accordance with the preceding sentence shall hold office until the expiration
of the term for which elected and until such director’s successor shall have
been elected and qualified. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent
director.
PROPOSED AMENDMENT TO THE CURRENT
BYLAWS – REVISE AND RESTATE ARTICLE III, SECTIONS 1 AND 2
Section 1. Number, Election, and
Terms
Except as otherwise fixed pursuant to
the provisions of Article IV of the Certificate of Incorporation relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, the number of directors shall be fixed
from time to time by the Board of Directors but shall not be less than three.
Subject to the succeeding provisions of this Section 1, the directors shall be
divided into three classes, designated Class I, Class II and Class III, which
shall be as nearly equal in number as possible. At the 2016 annual meeting of
stockholders, the Class I directors shall be elected for a term expiring at the
third succeeding annual meeting
of stockholders (the “2019 Annual
Meeting”), and any director appointed to fill the vacant Class I position shall
serve for a term expiring at the 2019 Annual Meeting. At each annual meeting of
stockholders commencing with the 2017 annual meeting of stockholders, directors
elected to succeed those directors whose terms then expire shall be elected for
a term expiring at the next annual meeting of stockholders. Commencing with the
2019 Annual Meeting, the foregoing classification of the Board of Directors
shall cease, and all directors shall be elected or appointed for terms expiring
at the next annual meeting of stockholders. All directors shall hold office
until the expiration of the term for which elected, and until their respective
successors are elected, except in the case of the death, resignation,
disqualification or removal of any director.
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Subject to the rights of holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of directors may be
made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the election of
directors generally may nominate one or more persons for election as directors
at a meeting only if written notice of such stockholder’s intent to make such
nomination or nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Corporation not
later than (i) with respect to an election to be held at an annual meeting of
stockholders, ninety days prior to the anniversary date of the immediately
preceding annual meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the close of
business on the tenth day following the date on which notice of such meeting is
first given to stockholders. Each such notice shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the person
or persons to be nominated; (b) representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the
stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (e)
the consent of each nominee to serve as a director of the Corporation if so
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing
procedure.
Section 2. Newly Created Directorships and
Vacancies
Except as otherwise fixed pursuant to
the provisions of Article IV of the Certificate of Incorporation relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, newly created directorships resulting from any increase
in the number of directors and any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence shall hold office
until the expiration of the term for which elected and until such director’s
successor shall have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
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